Western Asia emerges from Trump's nightmare

T he illegal and disastrous war that Trump has been pushed into by Israel is bringing about big changes in the Gulf

region,just not the ones that he and Netanyahu intended. New economic and political connections bypassing the US

are being revealed.

Graham Douglas

The war in Iran is revealing some interesting information about the economies of the Gulf, and as a recent article points out, new political alignments are emerging. Blockading the flow of ships in the Persian Gulf has shown that, besides oil and gas, but depending on them, two globally crucially materials are made there: Nitrogen fertiliser in the form of Urea, is massively

exported by four Gulf countries. In the World Bank list the top 3 places are taken by Saudi Arabia, Egypt and Oman, totalling over 10 million tons annually, and Iran adds about another 5 million tons, much of it going to Turkey, Brazil, Nigeria (which also produces significant amounts), and South Africa. Developing countries have become integrated into world trade as importers and producers, not just exporters of raw materials.

Urea is not a raw material; it is produced by heavy industry. Natural gas, methane, is one raw material, the others being the air we breathe and water. In a 2-stage catalytic process methane is first reacted with steam to produce hydrogen, which is then combined with nitrogen from the air, by the Haber process famous from school chemistry textbooks, to produce ammonia. From ammonia, urea is produced using the massive amounts of C02 that also come from the first stage along with hydrogen. And aluminium is produced in large quantities in five of the Gulf states, because cheap energy is required for the aluminium smelting process, and the fossil fuels make the process economically viable. Aluminium ore, bauxite, does not exist in the Arabian Peninsula, but it is imported in large quantities from the otherwise poor west African country Guinea-Conakry, mostly to the UAE, although Oman has recently become important for having ports outside the blockaded Strait of Hormuz.

These trading links, made more visible by the crisis in the Gulf, reveal the shifting tectonic plates of the world economy, in which the dominance of the US is beginning to fade. As suggested in a recent article, beyond the present war, which may temporarily push Saudi Arabia and the UAE closer to the US and Israel, there is a bigger picture of emerging groups of countries which are negotiating a rational organization of the flows of goods and raw materials in their regional interests, not according to the dictats of the US.

The current crisis for Gulf shipping could be solved by consolidating a process that has already begun with Pakistani and Thai ships: transit fees. If the Strait of Hormuz were considered like the Suez Canal, it would be rational for ships with valuable cargoes to pay a transit fee, shared between Iran and Oman, the two countries bordering the strait. At present, the Strait of Hormuz is considered international water, but at its narrowest point it lies completely within the two 12- mile territorial limits of Iran and Oman.

The largest ships that pass through the Suez Canal are charged $500,000 or more by Egypt, a bit less than the $2 million reportedly paid recently to Iran by a tanker owner, with rumours that in some cases bills have been settled in Chinese Yuan. Ironically, while Trump has been whining about NATO countries not paying enough for the US defence umbrella, some Western Asian countries - let's stop using the Eurocentric label 'Middle East' - are asserting their freedom to make trade agreements without US approval. The grown-ups are in the room in the Gulf, but not in the White House.

Then there is the biggest nightmare of all for the US - that oil might be traded in other currencies than the Dollar, not bitcoin but the

Yuan, the Euro and the Rouble. If this were to happen to the world's reserve currency, the US could no longer run their economy with a permanent deficit and carelessly spend so much on foreign wars.

'America's backyard' -

The Monroe doctrine of 1823 which formalised the US policy of regarding Latin America as its sphere of influence to control at will, was formally ended in 2013 by John Kerry. But Trump resurrected it on the date of its 203rd anniversary. Trump's war with Iran, after deliberately destroying the 2015 agreement achieved by Obama in 2015, is not the only recent shift in US policy, Venezuela suffered

too. The Gulf Cooperation Council countries have been rationally diversifying their economies, to end their total dependence on oil and gas, and take advantage of their strategic position between the Americas and Asia, but Venezuela's economy is still 95% dependent on oil exports, and Trump was able to do a quick in-and-out raid to get a compliant new government in place there.

The Gulf States are run by dictators, but they've been smart enough to have a long-term economic plan, in contrast to the corrupt left-wing regime in Venezuela which squandered their income and never developed a manufacturing industry. Despite all the left-wing rhetoric, it was mucho tango pocas nueces for the population. Car production by US companies was shut down by the lack of raw materials and components resulting from complex Venezuelan currency controls and government mismanagement. But the Venezuelan economy has also been limited by US sanctions on their oil industry. By 1928 Venezuela was the world's leading oil exporter and the second-largest oil producer in the world, only overtaken in production by Saudi Arabia by the late 1940s. And in the 1970s, while other Latin American countries struggled under dictators, 'Saudi Venezuela' developed a prosperous, oil-dependent economy. The 1973 oil crisis, following the Yorn Kippur war with Israel, greatly raised its standard of living. What happened later can be attributed to a confluence of factors, including decades of overspending and mismanagement, which ultimately led to the 'resource curse’.

There are two factors in play - oil and the stranglehold of the US. Beginning with the US-UK coup against Iran in 1953, for daring to nationalize its oil production, this playbook was exported to Latin America. Paraguay became the CIA's Latin American base in 1954. Nationalization of oil production was a key reason for US involvement in the 1964 coup in Brazil, but since offshore oil was discovered in 2005 Brazil is now a leading country in the southern hemisphere.

For a period, the US dominated much of South America through installed dictatorships, but in the Arab world practically every country has had an authoritarian government supported by the US. Iran (not an Arab country) has been the exception since 1979, but it too became a dictatorship again after the fall of the Shah, -ma theocratic one - and in all these countries, independent political parties and political discourse have been strangled and reduced to religion, conventional in Sunni countries or radical Shia Islam in Iran.

Latin America, culturally closer to Europe, has flourishing political debate. A new Arab Spring is the elephant in the room that must come out of the closet. Trump, foolishly caving to Israel's pressure, now needs to get out of a desperate situation, his 'Waterloo' according to one commentator, and even his Maga base and security chiefs are turning against him. Change is coming for Humpty Trumpty, like it or not, and for Western Asia.

This article was first published in The Prisma, where it can be read with accompanying images:

https://theprisma.co.uk/2026/04/06/western-asia-emerges-from-trumps-nightmare/