Alastair Crooke on how the Iran war is reshaping global geopolitics
Glenn Diesen interviews former British diplomat Alastair Crooke on the strategic consequences of the Iran war.
Summary
Glenn Diesen speaks with Alastair Crooke, former British diplomat and founder of Conflicts Forum, about how the Iran war is reshaping geopolitics far beyond the Middle East. Crooke argues that Israel has effectively lost the war alongside the United States, plunging Netanyahu into a political crisis that may end his career, and that the broader Zionist expansionist project is now being openly questioned within Israel itself. He contends that Russia has undergone a fundamental shift in strategic posture — drawing direct lessons from Iran's use of conventional missiles against US targets — and is moving toward reasserting nuclear deterrence as a credible threat against European escalation. Crooke also argues that Iran's potential control of the Strait of Hormuz could dismantle the petrodollar architecture that has underpinned Gulf-Western financial relations since 1973, with China quietly but forcefully pushing back against US economic dominance in parallel.
Key Takeaways
FULL TRANSCRIPT
Introduction
Glenn Diesen: Welcome back. We are joined again by Alastair Crooke, a former British diplomat and negotiator with decades of experience on conflicts in the Middle East. Alastair Crooke is also the founder and director of Conflicts Forum. You recently wrote an article, also published on your Substack, on the geopolitics of the world being reset by the Iran war. I was wondering if you could unpack some of this. Why is it that Iran is not just a strategic defeat for the US or a regional crisis, but that the geopolitics of the world are also being impacted?
Israel's Crisis and the Collapse of the Expansionist Project
Alastair Crooke: I think there are a number of reasons. First of all, there are three countries being directly impacted. The first is Israel. There is a crisis in Israel. I was just reading this morning the reporting from Israel that Netanyahu is in despair at the possibility of an agreement — completely opposed to it, in complete despair, and concerned about his future because, as you know, there are cases pending against him which could end up with him having to go to jail. Corruption cases, long-standing ones, still ongoing, and which legal authorities suggest, if they do go to conclusion, he might be convicted.
The other aspect of this is the elections and the pardon that Trump has been trying to produce for him. So far it hasn't produced a pardon. In fact, what Netanyahu is asking for is the complete erasure of the cases against him — that they should simply be taken off the charge sheet. So far that hasn't happened.
There is thought — and I emphasise this is Israeli speculation within Israel — that it may be preferable for Netanyahu to resign and leave the government early rather than face defeat in an election in September or October. It seems likely the election will be in September, not October, because October resonates badly with many Israelis because of the seventh of October. He wants to distance himself from that. But it's looking as if he's desperate because the pardon is not coming through, a deal is not coming through, and even if he gets a pardon he is refusing it as it stands because he is not going to admit guilt — and that is required under Israeli law. The tensions are growing enormously.
Israelis had been hugely enthusiastic at the outset that America was going to come in and, with the greatest power in the world joining with Israel, effectively destroy Iran. That's what they want — the destruction of Iran. Now it's being internalised in Israel that this isn't going to be the outcome. In fact, Iran has won the war, and therefore Israel has lost the war as well as America. But Israel has lost even more, and it is calling into question very deep issues. People have said this — that this is the collapse of the whole greater Israel project. Israel is now stuck with five or six unwinnable wars and none of them are going particularly well: Gaza, the West Bank, Lebanon particularly is going badly. As the chief of staff said, if we were to manage this, we would need six more IDFs than we have. They are stuck in unwinnable wars with not enough troops and no particular way out.
Iran was supposed to be the magic bullet that would take Israel out of this deepening crisis into a different period. So some people — and I'm not pretending this is a majority, but you are starting to see quite serious, high-level people in Israel saying that at the end of this, we have to go back to what Ben-Gurion originally said: that Israel is a small country, few resources, small population, and we have to stay within our borders. Ben-Gurion also endorsed the Clausewitzian formula that war is an extension of politics rather than politics an extension of war. His view was that Israel couldn't afford a big army — it could have a small professional army and had to rely on reservists.
So people are going back and saying we have gone quite wrong. We are overextended everywhere on this huge project to turn Israel into the hegemon of the Middle East, and it's all going wrong. We are trapped in all of these wars we have started. There are people saying we need to go back to the Ben-Gurion model, stay within our borders. And there are other people saying this way of dealing with the Iranian problem is not working, this attempt to get the United States to destroy Iran is not going to work, and so we need to rethink the whole Zionist project and look at it from different perspectives.
These are currents that are surfacing and they haven't reached fullness. I think partly because of the huge uncertainty about what Trump is going to do and what's going to happen in America and to the world economies. But this is a really important inflection point for Israel, because the polls show that Netanyahu is likely to lose for the first time. I've always been one who said he's Mr. Attack Man, he will always escape, and people predicting he's about to disappear have usually been wrong. I've always said he slithers around and gets out of these political problems. I'm not so sure this time.
The government has problems over conscription and the Orthodox groups in Israel. I'm not sure he's going to get out of this. The opposition is growing, and the criticism of this war is getting really very strong and very broad. The government might implode. And think about that — if Netanyahu were gone, who would carry the wide government agenda on their shoulders? From Ben-Gvir to all of the Likud — who would carry that on their shoulders? Maybe the whole political structure that Netanyahu has built up over these twenty years or so could implode, and everything would disappear into factions and internal faction fighting. I don't know, but there's a big question mark there.
Russia's Strategic Shift and the Lessons of Iran
You asked me about why I said other things are changing too. I think it's very clear Russia is changing. We have seen an inflection point in Russia. A very senior Russian figure who has been in the shadows of power for twenty years or more, Sergei Karaganov, has said explicitly in a paper he wrote that Russia needs to take the lessons from Iran — and particularly what he was pointing to explicitly was how Iran had used conventional missile weapons to hit vulnerable American and Western targets. When Iran did that, the West backed off and withdrew. He said we need to learn from Iran and take those lessons into our strategy.
He was also saying we have to go back to nuclear deterrence. People don't believe in our deterrence anymore. We had it in the 1950s and it worked. But then the Soviet Union imploded, the West became euphoric, and now if you mention that Russia is a nuclear power, the neocons have a refrain: "Oh, that's just bluster. Putin would never dare." Now we have the whole of NATO, its GDP, and its military against Russia. That changes the whole question. And so Karaganov has said that fear, and the sense that behind the conventional weapons there is ultimately the nuclear weapon — he is clear that the first line is conventional weapons and he urges Russia to develop new conventional weapons — but ultimately he says at the last resort, when your survival is in peril, you need people to fear the nuclear weapon.
And actually I agree that this will be a European interest, when Europeans are fluffing at the mouth about war with Russia all the time in an increasing frenzy, saying we can't talk, and what's more we're going to put sanctions on anyone that uses Russian oil or gas, even if it's bought from third parties through India or roundabout ways. We're going to stop all of that. It's a sort of suicidal run to the cliff — Europeans following each other over like sheep into an economic decline as they find that energy from America is much more expensive than the energy they used to have.
So I think it's not just at the public level but at the top level there's a change of mood. The Anchorage understandings made that clear — that Europeans are part of the blame, and quite clearly there is an understanding that this cannot go on, this ratcheting by Europe of more and more support for Ukraine in terms of missiles and drones. The UK in Anchorage announced it was going to send 120,000 more drones and long-distance missiles to Ukraine, and they are using NATO space as a base — from land in the Baltic region — to fire them into St. Petersburg and other places, assuming that because it's NATO space, Article Five of the NATO treaty would give them protection against any retribution from Russia. Well, they may be mistaken. Things are going to change.
What Russia said was slightly different. They said now we will attack the decision-making centres. And I think what they mean by that is the decision-making centre is not in Latvia. They know exactly where it is. It's in Britain, in France, and in Germany. That's where the war plan of ratcheting escalation is hatched. Latvia is just a tool in this. So I think that is changing rapidly.
China's Quiet Economic Pushback
And I think probably in the wake of the summit in Beijing where Putin and Xi met, what we see is that China — not openly, not with missiles, not with a great deal of noise — is really pushing back against the United States in economic terms. Forbidding Chinese citizens from buying in the US stock market. Stopping the other ways through digital currencies that America is trying to expand the dollar market. And doing the opposite — with the euro now saying that Chinese bonds are effectively good collateral, equivalent to cash, making them part of the deep bond market of China. So they are pushing back on the attempts by the United States to squeeze China in its capital expenditure and availability of capital. The Chinese bond market is expanding, with even European states now issuing bonds denominated in yuan.
It's not making a lot of news, not making a lot of noise. But just as Russia has moved into a new gear, China has moved into quiet but very forceful measures to limit American expansion. Look at what's happened to Nvidia — the Chinese have just taken the whole of the Chinese market back for themselves.
So everything seems to me to be heated and much more hard-nosed toward the West as a whole. Russia particularly is very seriously angry with Europe. And there is a Chinese really tough pushback coming on the economic measures being imposed against China. They've said: okay, bring it on. No more nice guy. They will push back economically. That's what's happened.
Glenn Diesen: No, it's a great point — how the Iran war has also changed Russia and China as well. I was interviewing Professor Karaganov on this issue as well, and I get the impression that in Moscow it's not just him. What he's saying reflects how the mood has changed fundamentally in Moscow. And I think it's often necessary to reflect a bit in the West, because over the past three-plus decades under the hegemonic era, we've had this luxury — if you will — of what war meant. We can attack, we can invade small, weaker countries, and war becomes something that happens on other people's territory. We have full escalation control. We decide when it starts, how it should be fought, when to finish it. And our adversaries always have this understanding that we can also use a bloody-nose tactic — we'll bomb you a little bit, and if you don't fight back it will stay a little bit, but if you fight back we'll punch back hard.
I think this is to some extent what the Russians wanted as well — some restraint. They didn't want it to escalate into a direct conflict, so they tried to wrap things up in Ukraine while they ignored the deeper and deeper Western involvement. But as you said, in conversations with the neocons, any restraint on the Russian side is seen as weakness. It's not just the neocons — it's the overall Western media and politicians. So I think they've also reached a point now where they say it's not possible anymore. With this level of Western involvement, the audacity of striking from NATO territory, speaking openly about mass-producing weapons to hit and destroy Russian energy infrastructure — this can't continue.
People keep telling me, well, they're not going to do anything because then they risk World War Three. But they also risk World War Three through inaction, because if they do nothing and the West continues this escalation of attacks on Russia, this becomes existential, and at some point the Russians would have to respond with nuclear weapons. So it seems very rational — sadly — but very rational to begin to hit back against NATO countries. And that's a very dangerous thing to recognise.
Alastair Crooke: I'd just like to say that the crucial thing — and I've spoken with Professor Karaganov directly about it — is what he's trying to do and what they are trying to do is change the psychology in Europe. That psychology of complacency is a threat that could lead to the Third World War. That's what they have to get at. That's why fear — it may seem contradictory — but that's why fear is important to deterrence. If you don't have fear, if you think it's all bluster, you can make bad mistakes.
I think they don't intend to be a boiled frog in this — you know the metaphor where you put a frog in cold water and then heat the water and eventually it dies unless it chooses to jump out of the pan. Russia doesn't intend to be boiled. My main concern is the word you used — "recognised" — and I don't think it's recognised. It's not even noticed in Europe. They are so oblivious to what is happening. And if they're not oblivious, they think it's good news. "Oh, this is good news, the attacks on Russia, the Ukrainians are fighting well."
They threatened to do this on the remembrance day in Moscow — the Ukrainians were restrained by the White House — but now the St. Petersburg Economic Forum is coming up this month. Who knows? After that first attempt, and with the regular attacks on St. Petersburg now using British-made, French-made, German-made equipment — maybe disassembled and then reassembled in Ukraine, but it's the same difference — used against targets inside Russia. The West thinks this is fine and wonders why there should be any retribution from Moscow. Well, because the mood is changing there, both at the leadership level and certainly at the popular level. People were really angry at the attack on the dormitory that killed twenty-one people.
Glenn Diesen: I saw the same in the media all across the West — they are now saying the attacks on Russian energy infrastructure are beginning to be felt on the Russian economy, and there's a big celebration about this. But they don't seem to appreciate that when there were small pinpricks, the Russians could afford to essentially absorb the Western attacks masquerading as Ukrainian attacks. But once they reached a significant punching power, why are we celebrating? This means the Russians can no longer look the other way. Now they're going to have to find a way of retaliating against Europe. And of course they will step up the attacks on Ukraine. So I would expect more hitting against Kyiv and also Europe will have a big target on its back. There doesn't seem to be any appreciation that actions will have consequences. They celebrate, and it's very strange to see this lack of any strategic thinking in terms of what we want to achieve and how exactly it can be achieved. Because they can hate Russia all they want, they can hate Iran all they want and try to destroy it, but if there's no pathway, what exactly are we doing? I don't understand politics anymore. I think they abandoned reason quite a while ago.
Alastair Crooke: When you ask what are they trying to do — I don't know. But my sense is that they have really pinned everything on Ukraine. It is the raison d'être of Brussels in an extreme way. Now everything is about Ukraine, Ukraine, Ukraine. Europe hasn't the money, it hasn't the munitions to go to war with Russia. So what is it all about, apart from preparing for it?
I think it's all about the hope in Brussels that somehow Trump will soon be off the scene, and then there will be a new administration, and then we go back to the Second World War era — which people have never forgotten — of persuading Roosevelt to join Europe in a war against Russia. So I think ultimately they fantasise — just as Israel fantasised about bringing the United States into war against Iran — Europeans fantasise about how they can show America that Russia is weak so that they can bring it in to join. And you remember King Charles said precisely this at the Congress when he went there. He said now America must prepare with Europe for war with Russia. An extraordinary thing to say. Why should this be in the European interest? But bizarrely, nonetheless, he said it. His speech was obviously partly written by the government, but nonetheless he said it. It was a really extraordinary thing to call for an American-European war on Russia. What are they thinking? I think so much of it has just gone nuts.
Glenn Diesen: Well, all of this would have been unthinkable. Imagine during the Cold War, Charles standing there saying let's prepare, we have to go to war against the Soviets. This is lunacy, but it's become normalised. But this also reflects, I think, a commonality between Russia and Iran — that when you're in a strategic situation where everything is on the line and the outcome will be all or nothing, countries are willing to take incredible risks and do very foolish things. And that's why the objective should be to look for some solution which isn't all or nothing, especially when defeating the opponent is not an option.
As you said with reference to Russia — be careful what you hope for. If you have the world's largest nuclear power in a war it believes it is losing and which it sees as an existential threat, you don't want to win this war. This is how you end up in a nuclear exchange. But the same can apply to Israel and Iran, because they can't really defeat the Iranians anymore. And as they realise, even in loss, even if the war doesn't end — as long as the Strait of Hormuz is in Iranian control — it changes not just the region but the whole global geopolitics as well.
But is there a third strategy? Because I don't like to see Israel in an all-or-nothing situation, because if there's this high risk they might go all in with a nuclear weapon. On the other hand, is there a possibility of a third option — to transform relations? Remember when the Chinese were trying to negotiate improved relations between the Saudis and Iranians, the former head of Mossad, Halevi, came out and said maybe we should do the same. There's no reason why we can't have fundamentally different relations with the Iranians. And indeed, as you've also mentioned in the past, this kind of ongoing extreme war is straining the ethos, the soul, and the future of Israel itself. So is there a path where the Israelis can — as Halevi suggested — fundamentally transform relations? Because it seems the Palestinian issue and everything else is plugged into the same problem.
A Possible Path: Israel, Iran, and a New Regional Architecture
Alastair Crooke: Yes, indeed. And I think it is possible. It's not ready yet. Certainly this is not the moment. But recall that after the Iranian revolution, Israel had good relations with Tehran for quite a period of time — partly they were selling weapons during the Iran-Iraq war. But then there was a change in Israel because the Labour Party came into power and wanted to change the equation. At that time, the equation was that the periphery were the allies of Israel and the near Arab world was the enemy. The Labour Party wanted to invert it and make peace with Arab states. So at that time everything inverted — the periphery became the enemy and the Arab states became what we see them now as, being herded into the Abraham Accords.
At that point, to keep the flow of money and to keep everything ticking over in the United States with the pro-Israel lobby, they needed an enemy. So from that date on, Iran became the enemy. Iran is always a week away from a nuclear bomb — how many times have we heard that? We've heard it from Netanyahu for twenty years: Iran is the enemy, Iran is going to have a nuclear weapon, he's going to use it against Israel. And that was done explicitly to facilitate the switch into the near abroad, to make peace with the near abroad at the expense of the periphery. As a consequence, Iran was demonised and has been demonised ever since.
So theoretically at least, Israel could choose to switch back and understand — and I think this will happen sometime — how Israel will get out of this situation. Well, one thing they could do would be to talk to Iran. It wouldn't be that difficult. In fact, someone suggested that from within Israel — the head of the Atomic Energy Commission. He said, "You'll see — first Israel will stop it, the Americans will come next, and the Europeans will come on to it at the very last." But of course, if you want to have a settlement, there's only one address that could change the whole situation in the region. I know this is completely heresy to even suggest it, but when people get into existential difficulties — like Israel seems to be getting into — I remember at that time people saying, well, to get a solution on the Palestinian front we need to talk to Arafat. Well, to get a solution on the regional level, you would need to talk to Iran.
And this is happening in a sort of roundabout way. Saudi Arabia and other Gulf states — not perhaps Abu Dhabi, but other parts — are looking into a new security architecture for the Gulf: Gulf-led security, not American-led, not including the Americans. It's been in the works for a little while, but it's suddenly got great impetus now because Gulf states are frightened about the future — is there going to be another attack on Iran, and what will be the consequences for them? And Iran has at times made it clear that if a Gulf security architecture without the Americans were to take place, and if they could be part of it, why not?
The whole Gulf-over-Arab alliance against Iran — it looks as if that may not be sustainable anymore after this war is over. Change could be forced upon the Israelis.
Glenn Diesen: Because the Iranians don't necessarily need a political deal with the Americans. If they hold the Strait of Hormuz, I think — well, if I were an adviser to the Iranian government, I would say what they already know: if you control the Strait of Hormuz, you don't have to return to crippling sanctions and endless threats from bases around you. You can put tolls on the countries that put sanctions on you, create incentives for them to drop it, put a higher toll on those who threaten you by hosting US bases, put a toll on those who use the dollar for energy sales. So essentially dismantle the petrodollar connection to the region.
And after all, these bases have now been largely destroyed as well. The American bases in the Gulf states — at some point, maybe many of the Arab states would think whether or not it's a good idea to even have them rebuilt. They have to adjust to new realities if they saw that the US presence brought them war instead of security, and essentially there's no going back to the old status quo. Indeed, you saw now with Oman — they're in discussions with the Iranians to participate in this toll arrangement. I think that's a good idea if Iran wants to facilitate a Gulf cooperation and a security architecture to collectively deal with this, as opposed to living under Iranian dominance. But Trump responded by saying that if Oman does this, he will blow them up. At some point, though, you can't keep this whole show together with threats alone.
So — you and your wife follow both Israeli media, especially the Hebrew media, very closely in your Substack. Do you see any reaction to the sustainability of the regional security architecture, and whether or not there could be a fundamental change to the architecture such as Halevi outlined?
The Petrodollar Architecture and the Gulf's Future
Alastair Crooke: I think the architecture is going to change anyway — the financial and economic architecture — because if the Iranians continue and insist on controlling Hormuz and receiving payments in line with the Bosphorus model, where vessels transiting the strait have to pay environmental fees to Turkey and other fees fixed on the tonnage of the vessel, then I think it will be the end of that sort of petrodollar economic architecture.
The Gulf has always been based since 1973 on a sort of financialised Western architecture, and more recently on an AI-based architecture with these huge data centres being built in places like the UAE. And the Iranians have said: well, you can't go on having that sort of data centre if you want to be in the region. You've got to mesh in with the region. You can't just be serving as a basis for data centres which are probably meant for intelligence purposes against Iran and others anyway.
So I think if the petrodollar goes — and the original intent of the Gulf states was to take advantage of the high price of oil, keep it high, and then send the proceeds in terms of their savings back to Wall Street — that money has basically been the leverage for the great financialisation that took place in the West, particularly after 2008, with the rich elites becoming — I mean, a huge transfer of wealth to the elite minority at the expense of the real economy in the West.
To sustain that is — and I think Iran is taking aim at that whole financialised Wall Street economy in the Gulf. It's not at the top of the agenda, but it's there. And if Hormuz is taken, there will have to be an economic shift, because if they want to export their oil and gas, then they have to have relations with Iran, and then Iran will also question their economic postures. Some states will react badly to that. But many will not, and we see that already — the number of states that are trying to open relations with Iran. I think it's about thirty. Ostensibly under-the-table relations with Iran, but that will become more open and fixed, and I think that will change the whole complexion of this region.
Glenn Diesen: Well, with this massive redistribution of power, it should be common sense that the former status quo can't work anymore. Even the US — I think it must surely prioritise as well, because it seems the Trump administration is still very wedded to this idea of global primacy. But it introduces a lot of self-harm when it doesn't reflect the actual distribution of power anymore. We saw this with all its wars — first it sent all its weapons to Ukraine to fight the Russians, and then when it was time to fight the Iranians, it didn't have enough weapons to defend the Gulf states. So it began to pull weapons from South Korea, divert weapons going to Ukraine, to send them to the Gulf to fight the Iranians. And at the end of the day, they haven't defeated the Russians, they didn't defeat the Iranians, they can't defeat the Chinese in the future. Meanwhile, its allies — the Europeans, the Gulf states, the East Asians — are all now worried that the Americans can't defend them when it comes down to it. You can't be everywhere at the same time. They're going to have to learn how to prioritise and introduce some strategic thinking again.
I'm a bit hopeful that the US can adjust. My greatest pessimism at the moment is Europe. I just don't understand why — a few years ago we could recognise that NATO expansion, as Angela Merkel said, would be interpreted by the Russians as a declaration of war. And now suddenly we're in a place where we can't imagine any European security architecture that's not based on the dominance of the West — even as the Americans announce they want to go, even as we know we can't defeat the Russians, even as all the sanctions fail. Still there's no political imagination for anything besides going back to some Cold War bloc. It's extraordinary. Do you have any final thoughts before we wrap up?
Final Thoughts: The Gulf-AI Nexus and the Unravelling of the Old Order
Alastair Crooke: Only just one thing to add — we also have to see how closely intertwined the AI bubble — and I'll call it a bubble, because that's what I think it is — in the US is with the Gulf. The Gulf has been putting trillions and billions into AI projects in the US and has hosted these data centres in the UAE. And inevitably the architecture is changing, because the United States walked away from supporting the Gulf militarily during this war. The Gulf states understand that they've been abandoned by the US. So that puts into question this whole nexus between the tech brothers and the Gulf brothers on AI and that whole sphere — because without American protection, who is going to go on putting in trillions and trillions into projects in the UAE or elsewhere without a stable relationship between those people and Iran?
Glenn Diesen: Well, thank you as always for taking the time and sharing some of your insights. For the listeners, I would very much recommend visiting the Conflicts Forum Substack — it's full of great insights. So thanks again.
Alastair Crooke: My pleasure. Thanks. Bye for now.