Trump's Midterm Defeat: The Writing on the Wall

The inevitable has happened. Donald Trump has suffered a sweeping midterm defeat, with Democrats capturing control of the Senate and the House of Representatives. This is not merely a Republican setback; it is also the defeat of The Syndicate that chose Trump to contest the presidential election and continued to provide him with overwhelming support during his second term.

Trump's defeat was the writing on the wall. His administration's policies have increasingly hurt ordinary Americans, who are struggling with inflation, rising energy costs and economic uncertainty. The electorate has delivered a clear message: political rhetoric cannot indefinitely compensate for the failure to address people's economic concerns.

The election results also reflect growing disillusionment with Washington's traditional approach to foreign policy. American presidents have repeatedly committed enormous amounts of taxpayers' money to military campaigns without achieving their declared objectives. The world's most powerful military has demonstrated that overwhelming firepower does not necessarily translate into strategic victory.

The Iran war has arguably become the last nail in the coffin of Trump's political fortunes. The administration's inability to achieve its stipulated objectives, despite pursuing maximum pressure and military escalation, has exposed the limitations of its strategy. Rather than compelling Tehran to submit, the confrontation has inflicted substantial economic costs and further tarnished America's international image.

The electoral backlash was particularly significant because Democrats made gains in traditionally Republican strongholds, including Texas, South Carolina and Iowa. Trump's personal intervention, endorsements and campaign rallies failed to reverse the tide. Voters were not simply choosing between political parties; they were expressing dissatisfaction with presidential leadership and demanding greater congressional oversight.

The implications extend beyond domestic politics. Democratic control of Congress could constrain Trump's ability to pursue an aggressive foreign policy, although it would not automatically bring a fundamental change in America's strategic priorities.

The defeat of Trump and The Syndicate should serve as a cautionary lesson. A superpower cannot indefinitely sustain its global ambitions by transferring the costs of strategic miscalculations to its citizens. Economic well-being, political accountability and diplomatic credibility remain essential pillars of national strength.

The American electorate has drawn its line. Whether Trump acknowledges this verdict or doubles down on confrontation will determine the trajectory of his remaining presidency.

US Midterms: The Syndicate Must Revisit Its Iran War Strategy

The November 03, 2026, US midterm elections may deliver a significant verdict on President Donald Trump and his administration. However, irrespective of whether Trump and the Republican Party win or lose, I believe Washington’s policies will remain Israel-centric, with an increasingly brutal approach towards Iran. An extensive US-Israeli air assault on Iran after the midterms remains a distinct possibility.

My verdict is unequivocal: even another round of military assaults will not change the fate of this war. The United States has already lost strategically, having failed to achieve its declared objectives. Military superiority and the ability to inflict enormous destruction do not automatically translate into victory.

Ironically, the Trump administration has not swallowed this bitter reality. It continues to live under the illusion that the United States, in collaboration with Israel, can overpower Iran and compel it to surrender. This refusal to acknowledge strategic failure could lead Washington into another costly military adventure.

The prolonged, yet non-yielding, war has given Iran considerable time to revamp its military strategy and strengthen its strategic relationships with China and Russia. Although there is little discussion of this evolving cooperation in conventional and social media, its implications for the regional balance of power should not be underestimated.

Meanwhile, Arab allies hosting US military bases have had a bitter experience. Their critical assets have remained vulnerable, raising serious questions about the United States' ability to protect its regional partners. The presence of American military installations has not provided the security guarantees these countries had expected.

In my opinion, the time has come for “The Syndicate” to revisit its US war strategy. I can understand that even the Syndicate is not prepared to accept American defeat. However, refusing to acknowledge reality will only compound the consequences of strategic miscalculation.

Today, I suggest that Washington de-escalate, or even retreat, and take time to devise a new strategy. It must remember that the maximum-pressure policy has failed. Continuing to pursue the same approach while expecting a different outcome is an exercise in strategic adventurism.

A new, accommodating policy towards Iran is essential to ending this prolonged confrontation and the energy crisis it has unleashed. Global economies, including the US economy, are paying a heavy price.

The United States must recognize that another military assault cannot reverse a strategic defeat. The time has come to abandon the illusion of overpowering Iran and pursue a policy that can bring this war to an end.

Big Oil record cash windfalls from US-Iran war

According to Reuters, Big Oil is reaping near record cash windfalls from the eight-month-old Iran war, but Western energy producers’ reluctance to ramp up spending reveals persistent doubts about the industry’s long-term outlook.

BP, Chevron, Exxon Mobil, Shell and TotalEnergies reported combined net profits of US$56 billion in the third quarter, driven by surging oil and gas prices, record-high refining margins and ​strong trading results.

BP posted its highest quarterly profit ever, US$8.5 billion, as earnings from its refining business rose tenfold from a year earlier. For the other majors, the quarter was generally their ‌second-strongest on record, behind only the extraordinary gains booked following Russia's invasion of Ukraine in February 2022.

Market conditions remain incredibly favourable. Brent crude has surged around 60% to US$114 a barrel since the start of the Iran conflict on February 28, while benchmark European natural gas prices have climbed to their highest levels since late 2022. Diesel prices, meanwhile, remain close to September's all-time high above US$200 per barrel as fuel markets continue to grapple with refinery outages and disrupted trade flows.

Big Oil has so far shied away from ​major new spending, suggesting the majors do not see today's market conditions as evidence that the industry's long-term outlook has improved.

Entering the year, the energy industry had been bracing for a ​looming supply glut. Many companies were cutting spending plans, freezing hiring and intensifying cost-saving programs amid expectations that a flood of new oil and liquefied natural gas (LNG) ⁠supplies would pressure prices later in the decade.

The joint US-Israeli strikes on Iran in February and the prolonged closure of the Strait of Hormuz upended the short-term supply picture, as exports from the Gulf ground to a ​halt and refining capacity shrank.

However, energy companies have so far maintained their conservative approach, directing excess cash mostly to strengthening balance sheets and repurchasing shares.

The majors’ combined net debt fell to US$117 billion in the third quarter from US$204 ​billion in the first quarter.

BP, which entered the conflict carrying one of the highest debt burdens among its peers, nearly halved net debt to US$13.9 billion from a year earlier. The company will continue to focus on debt reduction, its CEO said.

Share buybacks also rose to US$12.3 billion in the third quarter, little changed from the previous quarter. Shell and TotalEnergies announced sharp increases in buybacks over the next three months, while Exxon said it planned to buy back US$20 billion of shares in 2027, a similar ​level to this year.

While debt reduction and share repurchases can be dialled up or down from one quarter to the next, capital spending and dividends are longer-term commitments that are much harder to ​reverse if market conditions deteriorate.

So it is telling that the majors' dividend policies and capital spending plans have remained largely unchanged since the start of the war.

Shell, for example, reduced its 2026 capital spending guidance by US$1 billion to US$23 billion to US$25 ‌billion despite the ⁠sharp improvement in commodity prices.

Chevron expects 2026 spending to remain at the lower end of its US$18 billion to US$19 billion guided range.

The extreme volatility and uncertain outlook have also curbed companies' appetite for large acquisitions, as buyers and sellers struggle to agree on fair valuations for assets.

The main exception has been North American natural gas, where abundant supplies and relatively predictable pricing have made it easier to strike deals.

Shell's U$16.4 billion acquisition of Canada's ARC Resources in April reflected growing confidence in the continent's expanding LNG export sector and long-term gas demand prospects.

TotalEnergies has also indicated interest in deals that would help raise its US gas production by around 1 billion cubic feet ​per day, although CEO Patrick Pouyanne said oil assets ​remained too expensive at current valuations.

Boards will review ⁠2027 spending plans before year-end, when companies could decide to increase shareholder distributions or accelerate investment. But all signs so far indicate that any changes will mostly involve returning more capital to shareholders.

What stands out in this bumper earnings season is that energy industry executives appear unwilling to treat today's elevated prices as the start ​of a new supercycle.

The experience of the past decade, from the 2014 oil price collapse to the pandemic crash and the post-Ukraine boom, has reinforced a preference ​for financial discipline over production ⁠growth.

That is understandable, particularly because the concerns driving the industry’s long-term uncertainty – namely the speed and shape of the energy transition, particularly in Asia – have not improved and may have got worse.

The wars in Ukraine and the Middle East have highlighted the risk of being overly dependent on imported fossil fuels. This could spur stockpiling, but it could also encourage countries to pursue more domestic energy production, from both traditional and alternative fuel sources.

There are ⁠growing signs that ​oil and gas markets could remain tight, helping to generate heftier profits for the energy majors. Over the longer term, ​geopolitical fracture and energy nationalism appear set to usher in a new era of greater energy market volatility.

 

AI Bubble: Investors Must Prepare for a Crisis Worse Than Sub-Prime

The artificial intelligence revolution may transform the global economy, but investors must not confuse technological progress with guaranteed financial returns.

The warning signs are becoming increasingly difficult to ignore. More than US$2 trillion in market value is set to disappear from the technology-heavy Nasdaq 100 in October, which has already declined over 5.8%. Investors are beginning to question whether the enormous sums being poured into artificial intelligence (AI) infrastructure can generate adequate returns within a reasonable period.

The problem extends beyond declining share prices. Big Tech companies are escalating capital expenditure, building data centres, acquiring expensive computing equipment and expanding infrastructure at an extraordinary pace. Morgan Stanley expects AI infrastructure spending to exceed US$1 trillion next year, while J.P. Morgan projects global AI capital expenditure of US$5.5 trillion by 2030.

What makes this development particularly worrying is the growing dependence on external financing. Companies that once financed expansion through substantial operating cash flows are increasingly approaching bond and equity markets. Meta's proposed US$97.5 billion fundraising and Microsoft's reported US$25 billion bond issuance illustrate the scale of financing requirements.

Investors must ask a fundamental question: what happens if anticipated AI revenues fail to justify these investments?

Data centres, specialized chips and associated infrastructure involve enormous upfront costs. Technology also evolves rapidly, creating the possibility that today's expensive assets could lose economic value before delivering expected returns.

The sub-prime mortgage crisis demonstrated how excessive optimism, leverage and interconnected financial exposures can turn a seemingly contained problem into a global financial catastrophe.

The AI investment cycle carries a different risk profile, but its potential transmission channels are equally concerning.

A sharp correction in technology valuations could spread into corporate bonds, private credit, banks and institutional investment portfolios.

There is no denying AI's transformative potential. However, technological breakthroughs do not guarantee that every company investing in them will earn attractive returns. Nor does strong revenue growth automatically justify unlimited capital expenditure.

My warning to investors is simple: do not become prisoners of the AI narrative. Examine valuations, debt exposure, cash flows and realistic returns before committing capital. The danger is not that AI will fail, but that financial markets may have priced in an exceptionally optimistic future.

If expectations collapse, the resulting financial damage could extend far beyond Silicon Valley. Investors who ignore these warning signs today may discover tomorrow that the AI bubble was considerably more dangerous than they imagined.

Arabs Must Come Out of the Illusion That the US Is There to Protect Them

When we launched our blog, Geo Politics in South Asia and MENA, in June 2012, I had a clear perception that the United States wanted to keep Arab monarchies strategically dependent on Washington. Its objectives were straightforward: secure access to inexpensive oil, ensure petroleum transactions remained predominantly dollar-denominated, and sell billions of dollars' worth of weapons to wealthy Arab states.

The US-Saudi strategic relationship laid the foundation for this arrangement. Over subsequent decades, Washington consolidated its influence over Arab oil producers while becoming their principal arms supplier.

Following the Islamic Revolution in Iran in 1979, the United States increasingly promoted the narrative that Iran posed a greater threat to Arab security than Israel. This perception helped Washington strengthen its military presence and deepen Arab dependence on American protection.

Egypt, although not part of the Arabian Peninsula, was persuaded to sign the Camp David Accords and subsequently normalize relations with Israel. During Trump's first presidency, several other Arab countries were encouraged to join the Abraham Accords.

Meanwhile, the United States established military bases across the Gulf, ostensibly to protect Arab monarchies against Iranian aggression. Recent developments, however, have exposed the limitations of this security arrangement. American bases were extensively used in military operations against Iran, yet their presence did not guarantee adequate protection against Iranian missile and drone attacks on Arab territories.

Developments surrounding the Strait of Hormuz have further strengthened the perception that Washington's regional priorities do not necessarily coincide with those of Arab oil producers. Disruption of this vital energy corridor threatens not only Iran but also the economic interests of Gulf exporters.

These developments should compel Arab leaders to reconsider decades of strategic dependence. The Iranian threat should not remain a permanent justification for Arab subservience to American interests.

The Gulf Cooperation Council (GCC) must convene an emergency summit to initiate a new regional security framework. Member states should overcome historical animosities, establish cordial relations with Iran and stop outsourcing their security to Washington.

They must also strengthen independent defence capabilities and expand strategic partnerships with China and Russia.

The time has come for Arab monarchies to recognize that American protection comes with American priorities. Regional security must be built through regional cooperation, not purchased through endless arms deals.

Stephen Schwarzman: The King of Capital and a Unique Diplomat

At 79, Stephen A. Schwarzman remains one of the most influential personalities in global finance. Widely known as the "King of Capital," he is the co-founder, chairman and chief executive of Blackstone, one of the world's largest alternative investment management firms. His journey from a modest family business in Pennsylvania to the commanding heights of international finance is a remarkable story of ambition, calculated risk-taking and persistence.

Born on February 14, 1947, in Philadelphia, Schwarzman grew up in a family that operated a dry-goods store. His early exposure to business came from working alongside his father. At just 14, he demonstrated an entrepreneurial instinct by starting a lawn-mowing business and employing his younger twin brothers.

He graduated from Yale University in 1969 and subsequently earned an MBA from Harvard Business School in 1972. His professional career began on Wall Street, where he joined Lehman Brothers and quickly established himself in mergers and acquisitions. By the age of 31, he had become a managing director.

In 1985, Schwarzman joined hands with Peter G. Peterson, a former chairman of Lehman Brothers, to establish Blackstone. What started as a two-person investment advisory business gradually evolved into a global financial powerhouse. Today, Blackstone employs approximately 5,000 people and manages more than US$1.3 trillion in assets. Its investments span private equity, real estate, infrastructure, credit, life sciences and other alternative asset classes. It has also emerged as a major investor in data centres, critical infrastructure supporting the global artificial intelligence revolution.

Interestingly, Schwarzman acknowledges that Japan played a crucial role in Blackstone's early survival and expansion. Japanese investors provided important capital when the firm was struggling to establish itself. He also developed enduring relationships with Japanese business leaders, including Yasuo Kanzaki of Nikko Securities. His admiration for former Japanese Prime Minister Shinzo Abe reflects his interest in economic reform and political leadership.

Beyond business, Schwarzman has cultivated relationships with successive US presidents and international political leaders. He describes himself as someone willing to serve his country by communicating American economic and trade priorities to foreign governments. He has particularly sought to facilitate understanding between Washington and Beijing, including during Donald Trump's presidency.

His engagement with China also extends to education. In 2013, he established the Schwarzman Scholars program at Tsinghua University in Beijing, modelled on the Rhodes Scholarship, to develop future global leaders with a deeper understanding of China. His philanthropic contributions have also supported Yale University, the New York Public Library and other educational and cultural institutions.

In 2019, Schwarzman published What It Takes: Lessons in the Pursuit of Excellence, sharing experiences from his business career, failures and personal development.

Two principles summarize his philosophy: "A better tomorrow" and "learn every day." His life illustrates how entrepreneurial ambition, strategic relationships and continuous learning can transform a modest beginning into an institution of global significance.

Ultimately, Schwarzman's influence extends well beyond Wall Street. Through Blackstone's investment decisions, philanthropic initiatives and relationships with political leaders, he occupies a distinctive position at the intersection of global finance, business and diplomacy.

Lula Victory or Defeat of Trumphology?

The re-election of Brazilian President Luiz Inácio Lula da Silva could prove to be more than a domestic political victory. By defeating Flávio Bolsonaro, the son of former president Jair Bolsonaro, Lula has delivered a significant setback to a right-wing political movement aligned with US President Donald Trump. The question is whether this victory signals the beginning of a broader backlash against Trumphology.

During his second term, Trump has pursued an aggressive agenda encompassing a trade war with China, sanctions on Russia, unwavering support for Israel in its campaign against Hamas, efforts to dislodge Venezuela’s leadership and, most consequentially, the US-Israel war against Iran. These initiatives were intended to reinforce American power and advance Washington’s strategic interests. Yet their cumulative consequences have raised questions about the costs of confrontation and the damage to America’s international standing.

Lula’s victory suggests that Trump’s political influence is not irresistible. His support for ideologically aligned leaders does not guarantee electoral success. Brazil’s electorate has demonstrated that domestic priorities, democratic choices and national sovereignty can outweigh ideological alignment with Washington.

Some political observers speculate that Israeli Prime Minister Benjamin Netanyahu could be the next leader to face a serious political setback. Others anticipate further upheaval in Venezuela, potentially creating an opportunity for the return of leadership previously displaced from power. These possibilities remain speculative, however, and depend on separate domestic and international developments.

The US midterm elections offer another important test. A setback for Trump’s Republican Party could constrain his legislative agenda, intensify domestic scrutiny and complicate the implementation of his foreign policy. Nevertheless, neither the scale of such a setback nor its consequences can be predicted with certainty.

It would be premature to interpret Lula’s victory as the beginning of the end of Trump’s political dominance. Brazil has its own economic, social and democratic considerations, and its voters were not necessarily casting ballots to influence American politics.

Nevertheless, the result carries a wider message: political power abroad cannot indefinitely substitute for domestic legitimacy, economic performance and diplomatic credibility.

Those who believe Trump has tarnished America’s image may celebrate Lula’s victory as an encouraging sign. Whether it becomes a turning point in global politics will depend on subsequent developments, not merely on the hopes of Trump’s opponents. Lula may have won an election, but whether this amounts to a defeat of Trumphology remains an open question.

 

US Revival of Prize Law Could Transform Maritime Risks

The United States is preparing to revive a largely dormant maritime legal framework that could significantly expand its power to seize vessels and cargo during armed conflicts. The proposed rules, published by the US District Court for the Southern District of Texas, could revive prize law, which has not been invoked since the aftermath of World War II.

Unlike conventional civil forfeiture, which generally allows vessel owners, cargo interests and other claimants to contest seizures, prize law determines whether ships or cargo can be lawfully captured as enemy property, contraband or property involved in violating a blockade. Under this framework, ownership could transfer immediately to the capturing nation, which may appropriate the property for government use or sell it, with proceeds deposited into the US Treasury.

The proposed procedures would establish modern mechanisms for presenting evidence, verifying ownership, limiting discovery and hearing appeals. The court has invited public comments until October 23, 2026, before deciding whether to adopt the rules.

The timing is significant. As military operations in the Middle East intensify, Washington appears increasingly interested in restricting Iran's ability to export oil and sustain maritime trade. Prize law could provide an additional instrument to enforce blockades, extending the risk beyond sanctioned tankers to third-party vessels and cargoes caught violating lawful wartime restrictions.

This development could fundamentally alter the risk calculations of shipping companies, charterers, cargo owners and insurers. Vessels that are not themselves sanctioned may nevertheless face capture if their activities fall within the scope of applicable wartime rules. Consequently, route planning, insurance coverage, ownership transparency and security assessments would assume greater importance.

The implications extend to Southeast Asia, particularly Malaysia's Eastern Outer Ports Limit anchorage, where opaque ship-to-ship transfers of Iranian crude destined for China have attracted attention. Complex ownership structures, indirect cargo movements and deceptive shipping practices could complicate enforcement while increasing the risk of regional maritime disputes.

However, the revival of prize law raises concerns about potential overreach. Although the proposed procedures may strengthen enforcement against blockade evasion, their application must remain consistent with international law, due process and legitimate commercial interests. Broad or arbitrary seizures could undermine confidence in maritime trade and intensify geopolitical tensions.

The strategic takeaway is clear: an old wartime instrument could become a powerful tool of modern economic pressure. Shipping companies must reassess their exposure, while governments and maritime authorities should prepare for a more contested trading environment. The revival of prize law may strengthen Washington's enforcement capabilities, but its legitimacy will ultimately depend on transparent procedures, legal safeguards and disciplined implementation.

China to support Bangladesh in achieving energy security

The United States and China have signalled support for Bangladesh’s economic recovery and energy security, Beijing expressing interest in expanding investment in the country’s power and energy sectors and Washington offering cooperation on debt management.

The assurances came during separate meetings between Bangladesh’s delegation and officials from the US Treasury Department and the Export-Import Bank of China (China Exim Bank) on the sidelines of the IMF-World Bank annual meetings in Bangkok, Thailand.

A member of the Bangladesh delegation said China Exim Bank had expressed interest in increasing investment in Bangladesh’s energy and power sectors.

The bank also informed the delegation that its chairman would visit Dhaka next week, raising the prospect of further engagement on investment.

The US Treasury Department, meanwhile, assured Bangladesh of cooperation in several areas, including debt management and bilateral relations.

Washington’s support is seen particularly important to Bangladesh’s efforts to secure financing from the International Monetary Fund (IMF), given the United States’ veto power over the institution’s decisions.

After meeting US Treasury officials, Finance Minister Amir Khosru Mahmud Chowdhury said Bangladesh had received less support from the United States than it had expected in the past, but hoped closer bilateral ties would lead to greater assistance.

The discussions covered debt management, bilateral relations and other issues, he said, adding that the improvement in relations had raised the government’s expectations of further US support.

Pointing to Bangladesh’s purchases of aircraft from the US and imports of goods including soybeans, the finance minister said the country should receive greater American support in advancing its development and economic interests.

Prime Minister’s Economic Adviser Dr Rashed Al Mahmud Titumir said the IMF, World Bank and US Treasury Department, among others, had acknowledged that the current government had inherited economic difficulties and high inflation.

The conflict in the Middle East had added to the pressure on the economy, he said.

They also said the current government was working sincerely to resolve the problems. As a result, the World Bank, IMF, US Treasury Department and other organizations have assured Bangladesh of their support.

According to Titumir, international financial institutions and US officials recognized the government’s sincere efforts to address these challenges. As a result, the World Bank, IMF, US Treasury Department and other organizations had assured Bangladesh of their support, he said.

The government expects confirmation of the assistance within the next two to three months, he added.

Xi-Trump summit appears ceremonial

US President Donald Trump and Chinese President Xi Jinping meeting in Washington on Thursday, marked their second face-to-face meeting this year after their May summit in Beijing. The White House rolled out the red carpet for Xi, with Trump personally greeting the Chinese leader at Joint Base Andrews, an unusual gesture that underscored the importance Washington attached to the state visit.

According to Nikkei Asia that has been closely covering this event, at the first glance, the summit looked like a major geopolitical event. In reality, however, the most consequential development had already taken place before the two leaders sat down together.

Following talks with Chinese Vice Premier He Lifeng, US Treasury Secretary Scott Bessent announced an agreement to extend the US-China trade truce by another two months. Given the potential global economic consequences, this announcement was more significant than anything that emerged from the summit itself.

Like the Beijing meeting earlier this year, this week's summit appeared to be largely ceremonial. According to a Xinhua readout, Xi once again sought reassurance on the US position toward Taiwan. On artificial intelligence, he called for the world's two largest economies to ensure that AI remains under human control. Additional agreements may still emerge, but for now the summit's tangible achievements remain unclear.

The ambiguity may have been exactly what Trump wanted. With November's midterm elections approaching, the US president is eager to demonstrate progress on the global stage. By holding a smooth summit with America's foremost strategic rival and meeting Xi twice in just over four months, Trump can argue that he has built a strong working relationship with China's leader, regardless of whether the meetings produced breakthrough agreements.

The international community, along with media organizations watched the summit closely in anticipation of major news. Yet the biggest takeaway may be what did not happen - no new confrontation, no dramatic breakthrough, and no clear shift in the trajectory of US-China relations.

We will continue to follow developments closely and provide in-depth coverage of US-China relations and what they mean for Asia and the world.

Ahead of this week's Trump-Xi summit, a familiar Western demand resurfaced: Let the yuan rise. As China's trade surplus builds toward another record and estimates suggest its currency remains as much as 30% undervalued, economists and policymakers are increasingly arguing that a stronger yuan is needed to rebalance trade flows.

Europe, where manufacturers are under intense pressure from Chinese rivals, has been particularly vocal about this point. While Beijing has allowed some carefully managed yuan appreciation, Chinese policymakers fear a rapid rise would squeeze already thin exporter margins, worsen unemployment and deepen the deficiency in domestic demand.

 

 

 

Xi’s Washington Visit: A Changing Balance of Power

Chinese President Xi Jinping’s upcoming visit to Washington for a summit with US President Donald Trump on September 24 comes at a critical juncture in global geopolitics. More than a bilateral engagement, the meeting could provide an insight into the changing balance of diplomatic influence between the world’s two largest economies.

Xi is arriving in Washington after an intensive diplomatic outreach covering the SCO, the Middle East and the wider Global South. His message is becoming increasingly clear - China’s foreign relations do not revolve around Washington. Beijing is building partnerships and expanding its diplomatic space while presenting itself as an advocate of dialogue, multilateralism and economic cooperation. The contrast with Washington is striking.

Trump has imposed punitive tariffs on a wide range of US trading partners, including traditional allies. These measures have generated retaliation, uncertainty and diplomatic friction rather than producing a corresponding surge in US exports. The broader issue is that unilateral tariff measures have also been challenged on grounds of their compatibility with the rules-based multilateral trading system.

Trump’s military confrontation with Iran has further complicated America’s international standing. The conflict has disrupted shipping through the Strait of Hormuz, one of the world’s most important energy arteries. The resulting disruption has affected oil and gas supplies, raised energy prices and created serious risks for commercial shipping and seafarers.

The crisis has also strained Washington’s relations with its traditional Middle Eastern partners. The China-brokered Saudi-Iran rapprochement had offered an opportunity to reduce regional confrontation. Renewed hostilities have undermined that spirit, leaving regional countries to reassess their dependence on Washington.

Meanwhile, Xi is using diplomacy to demonstrate that China has alternatives. His recent engagement with Egypt, alongside wider relations across Eurasia and the Global South, reinforces Beijing’s claim to a more multipolar international order.

This does not mean China has replaced the United States. America remains a formidable economic, technological and military power. But diplomatic influence cannot be sustained indefinitely through tariffs, pressure and military confrontation.

The Trump-Xi summit is being watched not merely for trade agreements, but for what it reveals about the future architecture of global power. One point is crystal clear; Donald Trump has antagonized relations with most of the countries around the world.

From Seven Sisters to Magnificent Seven: Is America’s Supremacy Changing?

The emergence of United States as the world’s economic superpower was closely intertwined with oil. For much of the 20th century, the global petroleum industry was dominated by the “Seven Sisters”—five American companies and two European majors. Their influence extended far beyond their home countries. They controlled substantial portions of exploration, production, transportation, refining and marketing, particularly in the Middle East.

Oil was therefore much more than a commodity. Control over its production and supply gave the West enormous economic and geopolitical leverage—and helped underpin American supremacy, but the source of power is changing.

In 2026, the United States still possesses unparalleled military capabilities. Yet its confrontation with Iran has highlighted a new reality - military superiority does not automatically translate into absolute strategic dominance. Iran’s ability to employ relatively inexpensive missiles and drones demonstrates how cost asymmetry can challenge even the most sophisticated and expensive military systems.

Meanwhile, another group of seven American companies has emerged as symbols of a new economic era - Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla—the “Magnificent Seven.”

Their power is fundamentally different from that of the Seven Sisters. These entities dominate artificial intelligence, semiconductors, software, cloud computing, data, digital platforms and other technologies that increasingly determine economic competitiveness, yet there is an important contradiction.

While Wall Street provides these corporations with enormous access to capital and valuation, their physical production and supply chains are global. Critical components, manufacturing capacity and rare-earth processing remain heavily dependent on other countries. A country can therefore lead the technological revolution while remaining dependent on foreign ecosystems for some of its physical foundations.

This raises a serious question, is America moving from an age of controlling the world’s most important commodity to an age of controlling its most important technologies—without necessarily controlling everything those technologies require?

The United States may remain the world’s most powerful nation. But perhaps the era of absolute American supremacy is giving way to an era of shared supremacy, in which China, Japan and other major powers increasingly possess the resources, manufacturing capabilities and technologies needed to shape the global order.

The Seven Sisters built an oil-powered America. The Magnificent Seven may be building a technology-powered America, but unlike oil, technology cannot be controlled in isolation.

Egypt–China: Is China Rewriting the Strategic Equation?

For decades, Egypt has been regarded as one of Washington’s most important partners in the Middle East. It was the first Arab state to establish diplomatic relations with Israel following the Camp David Accords and has remained a major recipient of US military assistance. Yet the strategic landscape appears to be changing.

The ongoing US-Iran war has forced countries across the Middle East to reassess their security and economic relationships. Against this backdrop, Chinese President Xi Jinping’s return to Egypt after a decade is more than a ceremonial visit. It comes as Beijing and Cairo celebrate 70 years of diplomatic relations and deepen cooperation in trade, investment, defence and technology.

The question, therefore, is not simply whether Egypt is moving away from Washington. Is China gradually rewriting Egypt’s strategic equation—and using Cairo as a gateway to a broader Middle Eastern and African presence?

Egypt occupies a unique geopolitical position. It connects the Arab world with Africa, the Mediterranean and the Red Sea, while the Suez Canal remains a critical artery of global commerce. Chinese investment around the canal has transformed this geography into a major industrial opportunity.

The relationship is also extending beyond economics. Joint military exercises and expanding defence cooperation indicate that Cairo is diversifying its strategic partnerships. At the same time, China’s growing engagement with Egypt reflects Beijing’s preference for influence through investment, infrastructure, technology and diplomacy rather than a conventional military footprint.

This does not necessarily mean Egypt is choosing China over America. Cairo may simply be seeking greater strategic autonomy at a time when regional countries are increasingly reluctant to depend exclusively on any single power, that may be the more significant development.

For decades, the Middle East operated largely within an American-led strategic framework. Today, China is emerging as an economic, diplomatic and technological alternative, while regional states appear increasingly comfortable cultivating relationships with multiple powers.

Perhaps, therefore, the real story is not Egypt moving from Washington to Beijing. It is the Middle East moving towards a new strategic equilibrium.

If so, the US-Iran war may ultimately be remembered not merely as another regional conflict, but as a catalyst that accelerated the transition from an old paradigm to a new one.

Shrinking US aircraft carriers

The glory days of the world’s longest-serving aircraft carrier are over, reflecting fatigue in the broader US fleet amid a decline in the country’s shipbuilding capacity, according to official Chinese military analysts.

In a report on Wednesday, Chinese state broadcaster CCTV said the US Navy’s reliance on extended carrier deployments was a cause for concern, particularly in the case of the USS Nimitz.

The Nimitz was commissioned in 1975, making it the world’s longest-serving aircraft carrier still in active service, and its retirement has been pushed back repeatedly.

According to the US Navy, two aircraft operating from the Nimitz crashed in incidents in the South China Sea in October last year.

“Judging from the series of accidents that have occurred, the Nimitz is already being kept operational with difficulty. The glory days of the Nimitz aircraft carrier are over,” Li Yaqiang, a former senior colonel in the Chinese navy and a military commentator, said in an interview with CCTV.

The carrier was originally scheduled to be retired in 2026, but the US Navy said its decommissioning had been postponed until March next year to align with the expected delivery of the second Ford-class carrier, the USS John F. Kennedy.

“Once the Nimitz retires, any delay to the Ford-class carriers under construction would leave the fleet below the US legal requirement of 11 operational aircraft carriers,” the CCTV report said.

China’s most advanced aircraft carrier, the Fujian, enters service

Since 2006, US law has required that the US Navy’s maritime combat force include no fewer than 11 operational aircraft carriers.

CCTV military commentator Wei Dongxu also told the broadcaster that the US military’s carrier operations continued to be stretched “and it is now at a critical point in the transition between old and new aircraft carriers”.

“The Nimitz is too old and its technical state is no longer reliable enough, so it has to be retired. But the process of bringing the new Ford-class carriers into service has been plagued by problems,” Wei said.

Wei said unresolved problems with the introduction of the new US carriers could mean that the navy’s fleet of 11 aircraft carriers existed “largely on paper”.

“The combat capabilities of the first Ford-class carrier have still not been fully realized, and the F-35C, the important US carrier-borne fighter, has yet to be deployed aboard the ship,” he said.

“This means US carrier deployments must rely on a mix of new and ageing carriers, reducing its advantage at sea.”

Wei also said the problems were largely related to the decline of the US shipbuilding industry since the Cold War.

Extended maintenance cycles for US aircraft carriers are no longer uncommon. In 2017, the USS George Washington entered Newport News Shipbuilding for a planned four-year refuelling and complex overhaul, but it was not returned to the navy until May 2023, or two years after the intended deadline.

Meanwhile, the enormous scale of China’s shipbuilding industry has become a concern in Washington, joining technology, critical minerals and medical supply chains as areas in which US officials fear Beijing has gained a strategic advantage.

A Pentagon report released in December 2024 said the Chinese navy was the world’s largest numerically, with a battle force of more than 370 ships and submarines, including more than 140 major surface combatants. The report projected that the Chinese fleet would grow to 435 ships by 2030.

By comparison, the US Navy had 296 battle-force ships as of September 30, 2024. The fleet was projected to shrink further to 283 ships by 2027 as planned retirements outpaced the commissioning of new vessels.

 

United States the Biggest Arms Seller

Today, I am referring to the second blog US – The biggest Arm Seller I had posted, as a novice, on June 22, 2012. At times I wonder why people are still reading this. Even today it is among the top 20 blogs visited. 

I am one of the millions of people who fail to understand why conflicts are created and allowed to grow that often lead to anarchy, civil war and war among the countries.

If it is not taken as ‘self-praise’, I can see several reasons why a blog written in June 2012 would still attract readers today. Looking at it critically—both its strengths and weaknesses—I think its continued popularity is more about the theme rather than the accuracy of the predictions:

1. It Addresses a Timeless Question

The opening question—why conflicts are created and allowed to grow—remains relevant. Wars, insurgencies, regime changes, and geopolitical rivalries continue to dominate headlines. Readers searching for explanations often gravitate toward articles that challenge official narratives.

2. It Captures a Historical Turning Point

The blog was written during the aftermath of the Arab Spring. Events in Bahrain, Libya, Syria, Afghanistan, Iran, and Pakistan were at the center of global attention. Today, many people revisit early commentary to see who "got it right" and who didn't.

3. The Arms Trade Remains a Hot Topic

My central argument that major powers benefit from arms sales while conflicts continue, still resonates. The world has since witnessed wars in Ukraine, Gaza, Sudan, and elsewhere, with defense spending reaching record levels. Readers often search for critiques of the military-industrial complex, and my title is highly searchable.

4. The Blog Raises Questions Rather Than Giving Definitive Answers

I repeatedly use phrases such as "one of the hypotheses," "one of the conspiracy theories," and "it is believed." This invites readers to think rather than simply accept a conclusion. Such content tends to have a longer shelf life.

My title, "US – The Biggest Arm Seller," contains keywords that people frequently search: 1) US arms sales, 2) biggest arms exporter, 3) Saudi Arabia weapons purchases, 4) Iran conflict, 5) Afghanistan and NATO Even after fourteen years, search engines can continue sending visitors to pages containing evergreen keywords.

I notice three shortcomings:

First, the article relies heavily on speculation without citing sources. Claims about future attacks on Pakistan and Iran, or military hardware being retained for future wars, are presented without evidence, the time proved both correct.

Second, it treats complex events largely through a single lens—great-power manipulation. Local political, ethnic, sectarian, and economic factors receive little attention, these also proved correct.

Third, some predictions did not materialize. Pakistan did not become the next major target after the NATO withdrawal, and several regional developments unfolded differently from what was anticipated.

My overall assessment is, the reason people still read this blog is probably not because every prediction proved correct. Rather, it reflects a persistent skepticism about great-power politics, arms sales, and interventionism.

Many readers continue to ask the same questions today that I raised in 2012. In that sense, the article has aged better as a commentary on geopolitical anxieties than as a forecast of future events.

For a novice blogger in 2012, it also displays something that has remained characteristic of my later writing: challenging dominant narratives and asking uncomfortable questions rather than merely repeating official positions. That is often what keeps an old article alive long after the news cycle has moved on.

What the US has lost in the War with Iran?

Wars are not won solely on the battlefield. They are also judged by whether they achieve their political objectives, strengthen deterrence and reinforce international credibility. By these measures, the United States appears to have emerged from its confrontation with Iran having paid a price that extends well beyond military expenditure.

The first casualty has been credibility. Washington's messaging shifted repeatedly—from demands for Iran's unconditional surrender to calls for de-escalation and negotiations. Such abrupt changes inevitably raise questions among allies and adversaries alike about the consistency of American strategy. A superpower derives much of its influence from predictability; when its objectives appear to change with circumstances, its deterrent value is diminished.

The second loss is strategic. Modern warfare has demonstrated that overwhelming military superiority does not automatically translate into decisive political success. The US has consumed vast quantities of sophisticated and expensive munitions while confronting an adversary capable of sustaining prolonged resistance through indigenous capabilities and asymmetric tactics. Wars of attrition are rarely favourable to even the strongest military powers if political objectives remain elusive.

Perhaps the most significant consequence has been Iran's enhanced regional standing. Despite facing coordinated military pressure and unprecedented economic sanctions, Tehran has demonstrated resilience that has strengthened its image among supporters and compelled regional actors to reassess its military and political influence. Whether one agrees with Iran's policies or not, its ability to withstand sustained pressure has altered regional perceptions.

The conflict has also exposed shortcomings in the strategic calculations of both Washington and Tel Aviv. Military power can destroy infrastructure, but it cannot easily compel political capitulation. Calls for unconditional surrender proved unrealistic against a state that had prepared for prolonged confrontation. Instead of projecting overwhelming dominance, the campaign underscored the limits of military coercion against a determined regional power.

History offers a consistent lesson: every great power eventually reaches a point where reassessing objectives becomes wiser than escalating a costly conflict. Strategic withdrawal is not necessarily a sign of weakness; it can be an act of prudence when the costs of continuing outweigh the prospects of success. Persisting with a flawed strategy merely compounds political, military and economic losses.

The US still possesses unmatched global military and economic capabilities. However, the Iran conflict serves as a reminder that power alone does not guarantee victory. Credibility, coherent strategy and realistic political objectives remain indispensable. When these are absent, even the world's strongest nation risks emerging from war with diminished influence rather than enhanced authority.

The Shifting Battle: From Oil to Shipping Corridors

For much of the twentieth century, oil was regarded as the world's most powerful geopolitical weapon. In the twenty-first century, however, control over global shipping corridors may prove equally—if not more—consequential. Whoever can influence the world's maritime chokepoints can shape not only energy supplies but also international trade, supply chains, and economic stability. Against this backdrop, the Red Sea appears to be emerging as the next major strategic battleground.

Following months of disruption around the Strait of Hormuz, growing concerns are now centered on the security of commercial shipping through the Red Sea. Together, the Strait of Hormuz, the Bab el-Mandeb Strait, and the Suez Canal constitute one of the world's most vital maritime corridors, carrying a substantial share of global trade, including oil, liquefied natural gas, manufactured goods, agricultural commodities, and containerized cargo. Any prolonged disruption would ripple across continents through higher freight costs, supply-chain bottlenecks, inflationary pressures, and increased energy prices.

The immediate question is not simply who is attacking commercial vessels, but who stands to gain from sustained instability in these strategic waterways.

Western governments and much of the international media have attributed recent attacks to Yemen's Houthi movement, arguing that the group continues to target maritime traffic as part of its confrontation with Israel and its Western allies. Given the Houthis' own public statements and previous operations, this explanation cannot be dismissed.

Yet geopolitics is rarely straightforward.

Military confrontations are increasingly accompanied by information warfare, where competing narratives emerge almost as rapidly as military events themselves. Some analysts caution against assigning responsibility before credible, independent investigations establish the facts. Premature conclusions can become powerful geopolitical tools, shaping public opinion and diplomatic responses long before evidence is fully examined.

Another line of analysis raises a different possibility. It suggests that if vessels linked to Saudi Arabia increasingly become targets, the objective may extend beyond disrupting commercial shipping. Such incidents could undermine the fragile rapprochement between Riyadh and Tehran, reviving regional rivalries that had begun to ease after years of confrontation. Those who favour a polarized Middle East would clearly benefit from renewed distrust between the region's two most influential powers.

There is also the Israeli dimension. Since the outbreak of the Gaza conflict, the Houthis have repeatedly declared that their maritime campaign is intended to pressure Israel by disrupting shipping linked to Israeli interests. If commercial traffic through the Red Sea becomes increasingly constrained, Israel's trade routes could face significant economic and logistical challenges. However, if the pattern of attacks shifts from Israeli-linked shipping toward Saudi-linked vessels, analysts will inevitably ask whether the conflict is being redirected by actors pursuing broader geopolitical objectives.

History suggests that great powers compete not only for natural resources but also for the routes that transport them. The struggle is no longer confined to controlling oil fields. Increasingly, the ability to influence strategic maritime corridors has become a source of geopolitical leverage. Disrupting a major shipping route can impose economic costs on multiple countries simultaneously without direct military confrontation.

Whether the current tensions represent an extension of the Israel-Houthi conflict, an attempt to derail Saudi-Iranian reconciliation, or a broader contest for influence over global shipping corridors remains an open question. What appears increasingly clear is that in today's interconnected world, strategic power lies not only beneath the ground in oil reserves but also on the sea lanes that connect continents.

The nation—or coalition—that can influence these maritime arteries possesses a powerful instrument of geopolitical leverage. In the twenty-first century, control of shipping corridors may prove even more valuable than control of the cargo itself.

Oil Is No Longer a Weapon

For decades, a major military conflict involving Iran would almost certainly have sent global oil prices soaring. Conventional wisdom held that any disruption in the Persian Gulf would trigger an energy crisis, fuel inflation, and push the world economy toward recession. Yet, nearly five months into the US-Iran war, oil prices have remained relatively stable. This apparent contradiction deserves closer examination.

The foremost reason is that the conflict has not significantly disrupted physical oil supplies. Energy markets react less to military headlines than to actual interruptions in production and transportation. Despite intense hostilities, oil has continued to flow.

The Strait of Hormuz, through which nearly one-fifth of the world's seaborne oil trade passes, remains open. Although shipping costs and insurance premiums have risen, oil tankers continue to transit the waterway. A prolonged blockade would almost certainly have triggered a dramatic spike in crude prices.

Iran has also continued exporting crude oil, primarily to China and, through indirect channels, to other Asian buyers. At the same time, Saudi Arabia, the UAE and other Gulf producers have maintained production, while exports through the Red Sea have largely continued despite heightened security risks.

The global energy landscape has changed fundamentally over the past decade. The United States has emerged as one of the world's largest producers of both crude oil and natural gas, reducing dependence on Middle Eastern supplies. Meanwhile, despite Western sanctions, Russian oil continues to reach international markets through alternative buyers and trading routes, preventing a significant supply shortfall.

Demand-side factors have also played a role. Slower economic growth in China and subdued industrial activity in several major economies have moderated global oil consumption, offsetting much of the upward pressure created by geopolitical tensions.

Perhaps the most important factor is market confidence that none of the principal actors wants to ignite a full-scale energy crisis by destroying vital oil infrastructure or permanently blocking key shipping lanes. Investors have increasingly distinguished between a military conflict and an energy war.

The lesson is unmistakable. The Middle East remains indispensable to global energy security, but today's oil market is more diversified, resilient and interconnected than ever before. As long as production continues, shipping lanes remain open and alternative suppliers keep the market well supplied, oil will struggle to serve as an effective geopolitical weapon. The era when a Middle East conflict automatically plunged the world into an oil crisis may well be coming to an end.

The Gulf Must Not Become the Next Casualty

President Donald Trump's latest remarks should be treated as more than political rhetoric. For the Gulf Cooperation Council (GCC), they should serve as a strategic warning. Every indication that the United States is prepared to sustain pressure on Iran rather than prioritize reconciliation raises an uncomfortable question: who stands to lose the most from another prolonged regional confrontation?

The answer is unlikely to be Washington or Tehran. It is the Gulf.

Over the past decade, GCC countries have invested hundreds of billions of dollars to diversify their economies, attract foreign investment and transform themselves into global hubs for trade, finance and tourism. Those ambitions depend on one indispensable ingredient—regional stability. Every new military crisis threatens to undermine years of economic progress.

Modern conflicts are no longer judged solely by territorial gains or military victories. They also reshape energy markets, sustain defence industries, influence financial markets and reinforce geopolitical leverage. Periods of prolonged uncertainty often coincide with higher military spending, increased demand for sophisticated weapons systems and heightened volatility in global commodity and equity markets. International media organizations also benefit from continuous coverage of unfolding crises. Yet the countries closest to the conflict invariably bear the greatest economic and security costs.

Energy remains at the heart of this equation. Any threat to Gulf shipping routes or oil infrastructure immediately disrupts global markets, increases freight and insurance costs and weakens investor confidence. While uncertainty pushes energy prices higher, it also encourages consuming nations to diversify supplies and seek alternative sources, creating long-term challenges for traditional exporters.

The GCC must also confront a strategic reality. Iran possesses limited capability to inflict decisive damage on the United States itself. However, American military installations across the Gulf represent visible strategic assets that could become focal points during any wider regional escalation. Whether justified or not, the presence of these facilities inevitably exposes host nations to risks that originate beyond their own borders.

This does not argue for abandoning long-standing security partnerships. Rather, it calls for a sober reassessment of whether existing arrangements continue to maximize Gulf security or inadvertently increase regional vulnerability. Every sovereign nation has both the right and the responsibility to periodically evaluate defence partnerships in light of changing geopolitical realities.

The Gulf has reached a pivotal moment. "Business as usual" is no longer a strategy. GCC leaders should collectively champion de-escalation, strengthen regional diplomacy and ensure that their territories do not become the principal arena for conflicts driven by external rivalries. Stability—not perpetual confrontation—is the foundation upon which the Gulf's future prosperity, security and global influence will ultimately rest.

Who Governs Yemen?

The emergency meeting of Yemen's Presidential Leadership Council in Riyadh over Iran's direct flight to Sanaa raises a fundamental question, who actually governs Yemen today?

The Council described the flight as a violation of Yemen's sovereignty and international law. Yet the very fact that the country's internationally recognized leadership convened outside Yemen inevitably invites scrutiny.

Governments derive legitimacy not only from international recognition but also from their ability to exercise effective authority over their own territory. In practical terms, the Houthis control Sanaa and much of northern Yemen, while the Presidential Leadership Council continues to rely heavily on external political and security support.

This reality reflects the uncomfortable truth that Yemen has evolved into a battleground where competing regional and global powers pursue strategic interests through local actors. Iran openly backs the Houthis, while the internationally recognized government enjoys diplomatic and military support from a coalition led by Saudi Arabia and backed by the United States.

The strategic significance of Yemen extends far beyond its internal politics. Sitting at the entrance to the Red Sea through the Bab el-Mandeb Strait, Yemen occupies one of the world's most critical maritime chokepoints. Whoever influences this corridor can affect international trade, energy supplies, and naval movements linking Europe and Asia.

It is therefore unsurprising that many analysts believe the broader contest in Yemen is less about restoring democratic governance and more about securing geopolitical influence over one of the world's busiest shipping routes. In this interpretation, Washington's overriding objective is to maintain strategic leverage over the Red Sea, while regional allies inevitably become participants in a much larger geopolitical competition.

Saudi Arabia is frequently portrayed as the principal architect of Yemen's prolonged conflict. Such a characterization, however, overlooks the wider strategic calculations of global powers. Riyadh has undoubtedly made decisions that attract criticism, but reducing the conflict to a Saudi-Iran rivalry ignores the interests of larger actors whose strategic priorities extend well beyond Yemen itself.

The tragedy is that while external powers compete for influence over a vital maritime corridor, the Yemeni people continue to pay the highest price. The real battle may not simply be for Yemen, but for control of one of the world's most strategically important waterways.