Middle East Will Lean Toward China After US-Iran Deal
Get the Geopolitics newsletter
Daily geopolitics — wars, elections, sanctions, the diplomatic moves that move markets. Free.
- The US and Iran signed a peace memorandum this week in which Iran pledged not to seek nuclear weapons — a commitment identical to its longstanding public position — while the deal left America as a "secondary player" in Middle East affairs
- The memorandum imposes no Strait of Hormuz transit fees for 60 days, after which Iran and Oman will negotiate the terms; charging high fees would be "short-sighted," the source argues, because it would push Gulf states toward pipelines and overland routes
- Israel is not a signatory and thus "will feel even less bound" by the deal, but Netanyahu faces September or October elections he is likely to lose, and his decades-long strategy of neutralizing Iran has visibly failed — Hamas and Hezbollah remain intact and the Tehran regime still holds power
- Iran's nuclear program is "severely damaged but potentially repairable," and the North Korea deterrence lesson remains a powerful incentive for covert resumption, keeping Israeli and Western suspicions alive even after the deal
- Iran's reconstruction, potentially seeded by a $300 billion fund referenced in the memorandum, will most likely be led by Chinese firms, which the source describes as having the capital, the skills, and lower exposure to US sanctions risk than American companies
- Gulf Arab states may now press Israel to accept Trump's 20-point Gaza plan, a position even Hillary Clinton endorsed in the Financial Times last week, though the plan's treatment of a Palestinian state remains "a mystery"
Why it matters: The memorandum reshuffles the Middle East's economic center of gravity: Iran needs reconstruction capital, China has it and is least exposed to US sanctions, and America has disqualified itself by leading the war that Iran survived. A $300 billion Iranian rebuilding program under Chinese stewardship would represent the most significant eastward reorientation of Middle East capital flows since the 1979 revolution — and leave China, not Washington, as the external power best positioned to monitor Iran's nuclear file.
Ask SkimNews
