Strategic consequences of war with Iran

The US-Israeli war with Iran has not only destabilized the Middle East, provoking a sharp rise in the prices of energy and other products, but also caused disruption in the world economy. The war has forced the allies and rivals of the United States to react quickly to the moves of an unpredictable and unreliable superpower. The result is a geopolitical realignment of historic proportions that will alter the global balance of power over the next decade.

The consequences of the war are, naturally, most felt and deepest in the region in which it is being fought. The war has already succeeded in convincing many of the Arab countries of the Persian Gulf that their Gulf Cooperation Council (a loose mechanism for diplomatic, economic, and defense cooperation long plagued by internal disagreements) is no longer fit for purpose.

The conflict has intensified the rivalry between Saudi Arabia and the United Arab Emirates, with the UAE recently announcing its withdrawal from OPEC after nearly sixty years of membership. The Emirates will now work more closely with Israel on intelligence, technology and security, in the hope of crushing the Iranian regime. Saudi Arabia, on the other hand, will try to find a path to peaceful coexistence with the Islamic Republic, while also reaching out to nuclear-armed Pakistan, Egypt, Turkey and strengthening coordination with China.

Both blocs will seek to maintain close security ties with the US, although this will not be as easy as it was before. One of the most immediate and significant consequences of this war is the erosion of the basis for coordinated decision-making in the Middle East.

Transatlantic relations are also noticeably weakening. Now, with the war in Ukraine heightening concerns in Europe, the Trump administration's decision to focus on Iran (and then criticize European leaders for helping) is giving new impetus to the work of creating a European collective defense system outside of NATO.

Yes, it is unlikely that the US president will try to pull the US out of the transatlantic alliance, and the Senate can legally block such a move. But on May 1, Trump said that America would withdraw 5 of the 36.000 troops stationed in Germany. He did so just days after German Chancellor Friedrich Merz criticized the war, which is increasing concerns across the continent. Trump also ignored European outcry over the lifting of a series of sanctions against Russia.

The result is deepening divisions within the Western alliance and growing European concerns that the White House will eventually reach a mutual understanding with Russia on security matters. Such a prospect is reason enough for Russian President Vladimir Putin to continue the war in Ukraine and hope that Russia will eventually make a breakthrough there as NATO disintegrates.

In Asia, the de facto closure of the Strait of Hormuz is causing enormous economic damage. Like the US’s historic partners in Europe, its Asian allies feel uncertain about the Trump administration’s long-term security and economic commitments. Japan, South Korea and Taiwan have fewer alternatives than Germany, France and the UK. There is no Asian alliance like NATO to tie them to Washington, and no structure like the European Union to connect them with each other.

In addition, these countries are being pressured by China’s economic, technological, and (growing) military power. China is now acting more assertively toward the ruling party in Taiwan and the government in Japan. These and other factors substantially reduce the likelihood that America’s Asian allies will follow the Europeans on the path to greater independence from the United States.

When it comes to China, President Xi Jinping understands that the country’s economy is slowing down, and that Trump and Putin’s adventurism is not doing them or their countries any good. So he is resisting the temptation to seize the moment and take on new risks while America’s attention is elsewhere. Instead, he will likely try to persuade the United States during Trump’s stay in Beijing to drop its support for Taiwan’s independence outright. In return, Xi can promise that China will buy a lot of American products. Even Trump’s closest advisers are not entirely sure that he would not succumb to such a temptation.

The Iran war has also accelerated another important shift involving China. It has shown Iranian leaders and the world how easy and cheap it is to close the strategically vital Strait of Hormuz for oil and gas trade. Other bottlenecks, such as the Bab el-Mandeb, which separates Yemen from Africa, and even the Strait of Malacca in Southeast Asia, are potentially at play. Moreover, this is happening at a time when China is the undisputed global leader in sustainable energy, electric vehicles and batteries, and the key minerals and processing that support them.

China’s historic transition to post-carbon energy production makes it a much more attractive commercial partner for the world’s largest energy importers. Everyone needs more energy, and while that brings short-term benefits to the US (and the dollar) as the world’s largest hydrocarbon producer, the vulnerabilities exposed by the war create huge long-term opportunities for China.

For all these reasons, the ongoing conflict in the Middle East will change international partnerships and the global balance of power more than any other event since the end of the Cold War.

The author is the founder and president of Eurasia Group and GZERO Media; is a member of the UN Advisory Body on Artificial Intelligence

Copyright: Project Syndicate, 2026. (translation: NR)