The Empire is Shaking

Cover: via https://www.theguardian.com/world/video/2026/mar/22/drone-footage-shows-widespread-damage-to-two-israeli-cities-after-iranian-missile-strikes-video?CMP=share_btn_url

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Fabian Scheidler || More than two weeks after the start of the war of aggression against Iran, the U.S. and Israel have still not achieved their war aim of regime change, and it is unlikely that they will achieve it this way. History shows that airstrikes alone do not usually lead to victory, let alone the overthrow of governments. On the contrary: those under attack often rally behind their leaders, especially when the aggressor, as in this case, bombs schools and hospitals.

But the war could turn out to be far more than just an expensive failed mission for the U.S. Iran’s missile strikes on U.S. bases and other targets in the Gulf states are shaking the entire power structure of the region. For one thing, the missile strikes demonstrate that the U.S. is unable to defend the Gulf states.

Let us recall: The historic deal in the 1970s between the U.S. on the one hand and Saudi Arabia and other Gulf states on the other rested on two pillars: The monarchies sell their oil exclusively for dollars and invest surplus petrodollars in the U.S. This ensured a permanent flow of funds toward the U.S. and Wall Street in particular. In return, the U.S. offered the Gulf states technological modernization and, above all, security.

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US Dollar Imperialism: The Crisis of a Changing Periphery, a Changing Core

The second pillar of this deal is now collapsing before our very eyes. The U.S. military bases have proved not only largely useless against Iranian missiles but also a burden on the Gulf states because they make excellent targets. Moreover, significant segments of the population in some Gulf states have long opposed these bases. In Bahrain, for example, where 60 percent of the population is Shia, there was jubilation after Iran succeeded in severely damaging the headquarters of the U.S. 5th Fleet there. The U.S. presence is thus proving to be a potential factor in domestic political unrest.

The severity of the strikes against U.S. bases is massive. Iran succeeded, for example, in destroying two key radar installations in Jordan and the United Arab Emirates that are crucial for guiding THAAD missiles—a central component of the defense against Iranian missiles. It would take many months, if not years, to rebuild these facilities, which cost billions of dollars. Other important bases were also hit, such as Erbil in Iraq, the largest U.S. Air Force base in the once-occupied country.

This situation could become even more dire if the U.S. and Israel are indeed heading toward a shortage of interceptor missiles. These missiles were already in short supply at the end of the 12-day war against Iran in June 2025—a key reason why the U.S. and Israel opted for a ceasefire at the time. Now, as various media reports indicate, arsenals may be nearing a more severe shortage. The already patchy defense against Iran would thus be decisively weakened.

The U.S. has also proven unable to keep the straits of Hormuz open, in spite of Donald Trump’s promise to escort ships. His desperate appeal to NATO and other allies to send ships to the Persian Gulf underscores the gravity of the situation. The fact that all U.S. allies—from the United Kingdom and Germany to Australia and Japan—have rejected Trump’s request is an humiliating sign of increasing helplessness and isolation of the United States. The Strait of Hormuz is the central lifeline of the Gulf monarchies; not only do oil and natural gas exports depend on its navigability, but so do vital imports. If it remains closed for an extended period, Gulf economies and societies will face further turmoil.

While the leadership in the Gulf monarchies begins to realize that the U.S. cannot protect them and is even bringing the war into their countries, the economic repercussions are further undermining the status quo. The Gulf states’ business model is based on stability. Both tourism and foreign investment are grounded in the promise of a glittering world shielded from the poverty and the constant wars in neighboring countries. Yet this model, too, might collapse. After all, who is going to buy islands off the coast of Dubai if people are not safe from missiles there? And if the wealthy stay away: Who would still want to invest billions in a region with an uncertain future?

The war has also highlighted the vulnerability of the region’s freshwater supply. Desalination plants—which provide 60 to 70 percent of the Gulf states’ freshwater consumption—could be wiped out by just a few Iranian missile strikes. Without freshwater, even the super-rich cannot survive. A quick escape might also be impossible in such a case: At the start of the war, private jets for hire became scarce overnight because only few providers were willing to take the risk. sThe luxury enclaves could end up as traps.

Many of the oil monarchies have diversified their economies in recent years. One of the new pillars is data centers operated by major U.S. corporations such as Amazon, Google, Microsoft, Palantir, NVIDIA, and Oracle. Yet Iran has already attacked Amazon data centers in Bahrain and the Emirates, with significant repercussions for digital services. The Iranian leadership has also presented a list of 31 data centers that it considers “legitimate targets” because they are used, according to Teheran, by the U.S. military. If some of these were to be hit, it would be a severe blow not only to the regional economy and data infrastructure but also to a central pillar of U.S. dominance.

Faced with this quagmire, Donald Trump is desperately trying to find an off-ramp in order to declare victory and end the war. But Iran will most probably not grant him the favor of a quick end.

Even if the war were to end in a relatively short time, the impact on the region and the geopolitical landscape would be immense and would only fully unfold in the years that follow. In any case, the Gulf monarchies will be forced to seek new models for their political and economic survival. In doing so, they will most probably pivot towards Asia, and in particular towards China, which has built strong economic and diplomatic ties in the Gulf in recent years and has positioned itself as a bastion of stability. It could be the beginning of the end of U.S. dominance in the Gulf.

Fabian Scheidler is the author of “The End of the Megamachine. A Brief History of a Failing Civilization“, published in numerous languages (www.megamachine.org). His most recent book, published in German and Spanish, is “Welfare or Warfare. Why Europe Has to Choose between Reason and Self-Destruction”. Fabian Scheidler also works for Le Monde diplomatique and many other media. http://www.fabianscheidler.com

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