LettersIran war is not just a short-term energy disruption
Readers discuss a possible motivation behind the war, Pakistan’s role as a mediator, and Republican silence in the face of the US president’s actions
In 2009, six years after the US invaded Iraq and rewrote its economy, China and Russia (not American companies like ExxonMobil) won Iraq’s most lucrative oil contracts. The United States paid for the invasion; rivals collected the prize. That outcome is likely to have shaped every strategic decision Washington has made in the Middle East since.
Operation Epic Fury is its answer.
The architecture of this campaign is legible to anyone reading it as capital strategy rather than security policy. The United States deliberately structured a military operation with no reconstruction mandate and no named successor government. The lesson absorbed from Iraq: destroying a state creates obligations, and obligations are liabilities. The theory with regard to Iran is that sufficient destruction produces a government desperate enough to negotiate on American terms, opening its energy sector to Western capital without occupation overhead. The commercial prize, without the balance sheet consequence.
But there is a second transaction occurring simultaneously that financial analysis hasn’t priced correctly.
Iran was not merely a regional adversary. It was the central node of China’s Belt and Road network in the Middle East – in 2021, Beijing agreed to invest US$400 billion in Iran – and a live demonstration that American financial hegemony could be circumvented. China has been purchasing Iranian oil in yuan, routed outside the dollar-dominated SWIFT system. The trade functioned. Had yuan-for-oil become a viable model beyond Iran and across the Organisation of the Petroleum Exporting Countries, the petrodollar system would have faced its first genuinely systemic challenger since Bretton Woods.