• By looking at current events and connecting the dots this article evaluates who is the biggest gainer from Russia/Ukraine and U.S./Iran Wars. What is the strategy?

Part 1 covered Implications of the US Iran War and written on April 29, about two months after the war started. Now that the US Iran Peace Agreement (60 days) about to be signed wrote Winners and Losers in the US Iran War 2026. With talks resuming and breaking down in quick succession it is worthwhile evaluating who is now the winner in the U.S. Iran and Russia (RUS) Ukraine (UKRr) wars.

What is the Impact of War 1 (Russia vs. Ukraine) on Russia?

When started in February 2022 Russia’s war on Ukraine was supposed to be a short one. Ukraine’s hidden talent and support from Europe and the U.S. has dragged on the war for over four years. 

The war has stressed the Russian economy affecting crude oil and gas exports to Europe. Ukraine drone attacks on Russian refineries have surely damaged the facilities. U.S. Sanctions on Russia, withdrawal of U.S. companies from Russia and freezing Russia’s dollar assets have added to the pressure.

Russia needed buyers for its crude and gas. That is where China stepped in to become the biggest buyer of Russian oil and the second largest buyer of Russian gas. This economic dependence made Russia move closer to China, putting aside old animosities. The relations have only got closer with time – the common enemy being the U.S. 

Since China has an economic leverage over Russia, it would be reasonable to assume that China has extracted benefits, one of which being trade in Yuan and not the dollar.

The Russians will stop the Ukraine war only when their objectives are met. Given the way Ukraine is fighting back now, that seems unlikely in the short term. Which means that Russia’s dependence on China can only increase, after being steady during the last few years. 

Inability to defeat Ukraine in four years has reduced Russia’s stature as a military power, even though ability to produce hi-tech weapons is accepted. Beneficiary China.  

Considering that China and Iran have a close relationship, it is possible that China is nudging Iran to help Russia even more, atleast till the U.S. Iran war started.

With Russia entangled in War 1, it is Advantage China. One superpower, less to deal with.   

What is the Impact of War 2 (U.S. vs. Iran) on China?

U.S. is adversary number 1 for China – economy and strategic global influence. 

The U.S. getting into a war with Iran seems like a mistake. Clearly, it underestimated Iran’s capabilities and military strategy. 

Hitting U.S. assets in the Gulf was a brilliant move and showed U.S. strategists in poor light. Weaponizing Hormuz Straight was another good move. It increased crude prices beyond $ 100 and affected the economics of GCC (Gulf Cooperation Council countries) too. Probably they and European allies forced Trump to entering into what I call, a one-sided Ceasefire. His heart wants to reach Iran a lesson but Allies want him to hold the ceasefire and continue talks.

War 2 forced the U.S. to seek China’s help, probably during Trump’s China visit, to make Iran see sense. This move increased China’s importance in the eyes of GCC amongst others. 

With Iran successfully targeting U.S. bases in GCC and damaging them, it broke the aura of invincibility around U.S. weaponry and reduced U.S. status in their eyes. It was a subtle message by China to GCC that the U.S. is no longer the sole provider of security in the Middle East. China too can provide security by keeping Iran under check.

Iran’s regional proxies, namely Hezbollah in Lebanon, Houthis in Yemen, Hamas in Palestine and Popular Mobilization Force in Iraq will keep the Israel/GCC companies in check just like China uses Pakistan to control/trouble India. 

This way China indirectly controls the world’s oil trade. 

By getting iron brother Pakistan to broker a peace deal with Iran, China has ensured it is playing a role in peace making without being visible. China is also, this way redeeming Pakistan in the eyes of the world.

Having started the war the U.S. is trying hard to get out. But the China Iran combine are making it difficult to close the deal. Any exit without capping Iran’s nuclear program would be unacceptable. Iran might keep the deal hanging, with inconclusive negotiations, for as close to the November mid-term polls as possible. The intent is to tire Trump by not concluding negotiations hoping he makes a big mistake out of frustration. For them, the way to defeat Trump is making Republicans lose the mid-terms polls.

Remember, China likes to win a war without firing a bullet. They killed U.S. domestic manufacturing capability (esp. small to medium scale) by building their own and exporting at a cost that reduced inflation rates in the U.S.

By not using its military equipment, China continues to build the aura around its performance. Like Iran, the world does not know what to expect.

The U.S. might want Iran to post removal of sanctions, invoice crude exports in dollars whilst China wants invoice in Yuan. No guessing which way Iran will go.

So also, orders from the Iran Rehabilitation Plan could go to Chinese companies.

Just as Russia weakened itself with war in Ukraine, China wants the U.S. to become weaker economically with its military exposed. China hopes that would weaken the dollar.

These two wars might weaken China’s two competitors Russia and the U.S. When that happens China will be Number 1. 

It will go for a peaceful takeover of Taiwan then and try hard to make Yuan, the world’s reserve currency or atleast second in line to the U.S. Dollar.

A Russia China Iran combine means weakening of the U.S. European Israeli combine. Saudi Arabia has aligned with Iron Brother Pakistan. UAE may get closer to India (closer if India supplies defence equipment) whilst others have to decide.

Turkey will be part of NATO but in the heart closer to Saudi Pak combine. Note that when the Shah expelled Khomeini in 1964, he first went to Turkey and then settled in the Shia holy city of Najaf in Iraq in the year 1965. Dream of reviving the Ottoman Empire could be on hold for now.

There are no permanent friends or enemies in the Middle East.

To read all articles on Foreign Affairs

Also read

1. Commonality between Trump and Aurangzeb

2. Why India should not be INSECURE about Pakistan role in US Iran Peace Talks

3. How Peace in the Middle East benefits Pakistan

4. Saudi Pakistan Defence Agreement is a U.S. tool to retain global dominance