November 16, 2026
A realigned Middle East and the world
By RN Bhaskar and Sakeena Bari Sayyed
Image: Copilot
On the surface, if you go by the utterances of Donald Trump, the war in the Middle East is not yet over. Scott Bessent, US revenue secretary, moved to a war base, possibly to spin a narrative that Iran is dangerous. At times, Trump predicts extinction, sending Iran to the stone ages. At other times, he also says that the end of war is near, provided Iran adopts a reasonable stance.
Accepting what is reasonable by Trump is akin to surrendering and accepting US hegemony. Iran has already stated repeatedly that there can be no talks without the acceptance of the seven key points in the MoU that was signed by US and Iran on June 14, 2026 (https://www.britannica.com/event/2026-Iran-war). So, it would mean that the war against Iran will continue.
Appearances are deceptive
But take a closer look. It does appear that war against Iran is almost impossible (https://bhaskarr.substack.com/p/blockading-iran-a-chimera). If war resumes, you can be sure that the first country to go back to the stone ages will be the US and the second – though not necessarily in that order – could be Israel. Of course, it could push many other countries to the stone ages as well.
The basics
But let’s go to the basics first.
The Middle East is crucial for the world. Iran has made it clear that if its infrastructure is touched, the entire Middle East will go up in flames. It has already demonstrated its capability and intent (https://bhaskarr.substack.com/p/trump-fiddles-and-usas-biggest-exports), thus it becomes clear that the very survival of the world depends on the survival of the Middle East, hence Iran.
Destroy Iran, or even attempt to destroy it, and excruciating pain will be felt by the entire region, and even the world. The consequences could be harrowing.
That could explain Trump’s latest ‘assurance’ that the military war is ‘effectively over’ (https://www.atlantanewsfirst.com/video/2026/11/10/trump-says-iran-war-effectively-over/).
The other alternative is to watch the total extinction of Israel. Maybe Israel’s current prime minister Benjamin Netanyahu still wants the war, because it will save him the ignominy of going to prison for corruption and war crimes. He also does not want an investigation into the October 7, 2023 (https://www.ynetnews.com/article/srf65caut), which many people believe was trumped up and allowed to happen. Trump may be prevailed to help out Netanyahu. But he too is scared of the consequences. Fear, greed, blackmail may all have a role to play.
But war will also result in an implosion of USA and Europe. These are the players who prompted the war against Iran, either actively, or by remaining silent in the face of the genocide in the Middle East. That could partly explain the latest admission by Trump that the military war against Iran is ‘effectively over’.
The wording is important. There can be no military war. That is because Iran offers no military option. Even bunker-busting bombs can penetrate only 10 metres into the ground. And, according to experts like John Mearsheimer, Iran’s missiles and other facilities are under 30 metres of the hardest of granite.
Nuclear bombs too will merely bounce off those mountain peaks, though the radiation will affect the entire Middle East, including neighbouring countries. Radiation, and the threat to the world, will drag in Russia and China as well, as they are closer to Iran than the US is.
That is why the US will be targeted in the next round. There is just no way out. This is despite all the blusterings from people like Pete Hegsett, the US secretary of defence (or war) who is currently being impeached in the US.
Make no mistake. This time, if the war resumes, the US president and many of his colleagues will also be dragged before the international courts as war criminals, which they are. That is why, the only country that will return to prehistoric times is USA with its oft-repeated repudiation of laws and UN accords.
Sadly, the US is invoking the times when its lawmakers thought rules did not matter – even when slaughtering and wiping out the Red Indians, or when it sought to (unsuccessfully) exterminate the blacks in America by setting police dogs on church-going-congregations. Despite these despicable acts, the US has mostly been able to escape charges of genocide and war crimes. But that could change if the Iran war breaks out.
Other factors
There are some other factors that are now making the US practice restraint. They all depend on the realisation that the US is rapidly heading towards impoverishment. Thus, the world is caught in the midst of Trump’s impotent rage against Iran, Netanyahu’s cries calling for war, and harsh realities.
To understand this, one must look closely at the three big income sources that have allowed the US to grow richer than any other country in the world.
Guns for sale
One factor that has helped the US is waging war. That in turn allows for the sale of military hardware and related services.
The US knows that wars cost money. But it knows that wars eventually result in selling more arms and military services to the world. That is why, it has disdainfully ignored the cost of wars to the US economy. Even under Trump, the cost of wars in Afghanistan, Iraq and Syria are estimated to have cost some $ 175 billion. In Trump’s current term, the cost of the Iran war for the US alone has been over $ 47 billion.
Compare the expenditure of over $ 200 billion and then look at the cumulative arms sales to the Middle East in 2021, 2024 and 2025. You get a figure of $788 billion. Not a bad business proposition. The parties who invariably benefit are those close to the President, including military contractors and arms dealers. The debt is eventually paid for through taxes that common people pay.
Unfortunately, that honey pot has crashed and has broken. US arms and military services have been proven to be inept before Russian, Chinese and even Iranian weaponry in the European and the Middle East theatres of war. Consequently, fewer countries now trust US arms and services. The failure of the US to protect Middle East monarchs has also dampened their willingness to put money for US military hardware.
The devil’s excrement
Latin America has a quaint phrase to describe oil. It is called the devil’s excrement. It is sticky. It corrodes values and the environment. Nothing could be truer for the US.
The second revenue generator for the US is oil – which is what made the Hunt brothers immensely wealthy. It is this lust for oil wealth that made it raid and pillage Venezuela. It effectively annexed a sovereign state. It even entertained plans of annexing Canada and Cuba, in addition to Alaska. The US had slipped back to the days of ‘right is might’ where rules don’t matter anymore.
But Iran changed all the plans that the US had. The attack on Iran ended up bleeding the US, destroying many of its oil installations in the Middle East, and devalued the equity stakes the US had in oil facilities across the Middle East.
The only Middle East country in which the US had no oil related investments is Iran (https://bhaskarr.substack.com/p/iran-was-once-an-ugly-duckling). This decision not to entertain either the UK or the US as equity partners was taken during the 1950s. Iran had nationalized its oil industry in March and May 1951 and forced the British out the same year. The British along with the CIA tried getting its oil business back, but succeeded only partially with the installation of Shah Reza Pahlavi as the head of the state. This changed in 1979. Today, Iran depends very little on US technology (it was helping Venezuela repair and maintain its oil facilities when this Latin American country was almost crippled by US sanctions).
Thus, if the war against Iran continues, the US runs the risk of losing all its investments in the oil sector from the entire region.
A new bubble to dazzle everyone
The third revenue stream for the US is IT or information technology. Today it accounts for over 50% of US market capitalisation. But there are fears that a meltdown for this sector could be round the corner. Remember how the dotcom bubble burst. That was when – in March 2000 — the Nasdaq Composite fell 78% from its peak of 5048. Even today, just the mid-term election results in the US have caused the already shaky Nasdaq indices to fall (https://asiaconverge.com/2026/11/theres-a-hole-in-the-budget-dear-donald/). They dropped 5.5%, while S & P 500 fell by 4.3% and DJIA 3.4%. “Stock prices of Tesla dropped over 10%, and of SpaceX over 9% in a day. Nvidia’s stock fell 9%, losing over $ 400 b. in market capitalisation, AMD and Micron lost over 17%”. Should a war break out, they will fall even further. Should AI sentiments burst, the fall could be steeper.
The shaky foundations of US markets were evident some time ago (https://bhaskarr.substack.com/p/will-the-us-bring-the-world-to-an). The feeling that the US could bring the entire world down was always talked of. This time, it is Iran which could do that.
Money, money, money
What this means is that of the three big sources of revenue for the US, two are already shaky. The one that survives is oil. But if Iran is dragged into war, even existing revenue streams will vanish.
More worryingly the US could lose its revenues from Europe and other countries as well (https://asiaconverge.com/2026/11/india-underperforms-its-neighbours/). It was to make more money on oil that the US lured Europe away from cheap Russian oil. That single decision, more than any other, almost bankrupted Europe (https://bhaskarr.substack.com/p/will-germany-rebound). Today, if Europe has to revive, it must go back to Russian oil. The US may soon be out of the reckoning.
Currently, the Middle East does appear to be a small player when compared to other regions. But the entire global trade is like a game of dominoes. If the Middle East stops supplying the US with money, all the dominoes will begin collapsing one after another. Trade with Canada has already begun to collapse. So has trade with Brazil. Even the US’ self-appointed viceroy of Cuba is silent. Europe is just learning to live without the US in NATO.
Together, they provide the backdrop which is compelling the US to shrink away from attacking Iran. Money talks louder than war. It was the lure of money that made the US jettison all respect for human lives. It even attacked the UN and the judges of the international courts. It harboured a war-criminal; it has continued to turn a blind eye to the massacres in Gaza and the West Bank.
The fear of losing money will drive the US to embrace values once again. It too will begin talking about world order and the United Nations.
Incidentally, those are the values that China has begun championing (https://www.fmprc.gov.cn/eng/wjbzhd/202610/t20261023_12046170.html). In its recent keynote address on the Global Governance Initiative (GGI), on October 23, 2026, Wang Yi, China’s external affairs minister, talked about the need to return to global governance.
Wang Yi explains how “President Xi’s message further outlines the great significance of reforming and improving the global governance system, sets the direction for the GGI’s implementation, and states China’s commitment and readiness to work with all countries for a more just and equitable world. It also provides valuable impetus for the international community to pool wisdom and efforts for tackling the problems and challenges confronting us.”
Realignments
The US has a significantly reduced role to play in trying to rebalance the world. The world will see major realignments – especially the Middle East. In trying to do this, it may have to cut loose its ties with Israel. The US vote during the mid-term elections made this clear. Israel will no longer be the lynchpin in that region. Fewer people are now heeding its redoubled cries for the need to re-stoke the war with Iran (https://bhaskarr.substack.com/p/trump-blinks-putin-winks-europe-sinks).
By the turn of this year, the US will have to try find its own place in the world, and the Middle East. The process of realignment has begun. If Israel and the US are not ready to come to terms with the change that is taking place, the first casualty could be Israel. It may even cease to exist. The US may then have to limp its way back to the world forum.
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Last week, we had two podcasts.
The first is on what the US mid-term elections mean for the world. Trump’s party has been rejected both for the House and for the Senate. The change in mood is evident. This means that the remaining two years of Trump’s presidency may not give him too much scope for mischief. Watch it at https://youtu.be/V4V6guLlETs
================
Last week, we had two podcasts.
The first is on what the US mid-term elections mean for the world. Trump’s party has been rejected both for the House and for the Senate. The change in mood is evident. This means that the remaining two years of Trump’s presidency may not give him too much scope for mischief. Watch it at https://youtu.be/V4V6guLlETs
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Another podcast is on liveable cities. Why are Indian cities at the bottom of the heap among developing nations? Why can’t India focus on making its cities liveable? The answers to these questions can be quite disturbing. Watch it at https://youtu.be/2b6P7TO3K7A
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Finally, do not forget our News behind the News
- Will Nvidia trigger the feared AI crash?
- India’s approach to AI and cyber security is flawed
- Retail inflation crosses Red line
- The spectre of Demonetisation has not been exorcised
You can find it at https://www.youtube.com/live/mI6tYfj6sbw?si=Hb8pjzTWeigQjmlp
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