Less than a month after Israel’s strike on Qatar, a dramatic geopolitical realignment is occurring in the Persian Gulf and beyond. The most notable examples are the Saudi-Pakistani alliance, which may include an extension of Pakistan’s nuclear umbrella over Saudi Arabia, and a deepening of cooperation between Egypt and Türkiye.
These have already been remarked upon, but key facets of this shift remain unexplored. In particular, the extension of Pakistani influence into the Gulf heralds the terminal collapse of the US petrodollar, and its replacement by the Chinese renminbi. To understand this dynamic, a brief overview of the Petrodollar system is needed.
The Petrodollar, or more correctly the Petrodollar Recycling system, refers to the arrangement by which Gulf Arab nations sell oil in dollars, and reinvest their proceeds in the US financial and defense sectors, in exchange for protection. This generates a cyclic flow of dollars, enabling the US to export its inflation abroad, and supposedly bolster American living standards.
In actuality, this redistributed wealth from America’s middle class to the elite, causing deindustrialization and a collapse of living standards across the US “Rust Belt”, triggering the political conditions which saw Trump’s rise. Additionally, the US “security” provided to Arab states more closely resembled a mafioso-style protection racket, with the US exploiting the threat of Saddam Hussein, then “terrorism”, then Iran, to pressure Arabs into compliance.
Now, with US security guarantees shown to be worthless after Israel’s failed strike on America’s MNNA (Major Non-NATO Ally) Qatar, Gulf monarchies are rapidly realigning. Saudi Arabia’s choice of Pakistan is significant, as Pakistan is firmly within China’s sphere of influence. China holds great leverage over Pakistan, which will hold leverage over Saudi Arabia, therefore placing them also within China’s orbit (due to the transitivity of leverage). Where Saudi Arabia goes, other Gulf states will likely follow. The Saudis will probably finalize BRICS membership in the coming months, and begin rapid de-dollarization (putting tremendous strain on America’s economy).
Egyptian-Turkish relations have been quietly improving for years, but UAE/Israeli disrespect of Egyptian national security issues has catalyzed their leadership into planning joint military exercises with Türkiye. This serves as a firm refutation of the East Med project, and a hard military limit on Israel, as their navy is vastly outmatched by such as alliance. Due to the coastal proximity of all Israel’s major cities, they would have no safe hinterland in the event of war.
These factors are no doubt recognized by the US leadership, which offered to host Erdoğan later this month. With America’s strategic predicament becoming desperate, Türkiye’s threat to abandon it (issued through Devlet Bahçeli last week) likely pressured the US into making concessions on outstanding issues, such as terrorist support in Northern Syria. The strategy of maintaining balanced relations with major powers, and resisting pressures to join a block, will soon provide dividends to Türkiye.
