CounterPunch Exclusives

CounterPunch Exclusives

Postponing the World’s Financial Winter, But For How Long? Iran’s MAD Standoff with the Rest of the World

Photograph by Nathaniel St. Clair

Announcing that “A whole civilization will die tonight,” Donald Trump threatened on April 7, 2026, to destroy “every bridge in Iran” and “every power plant … burning, exploding, and never to be used again.” His intention to continue committing war crimes is driving the world toward a Financial Winter as devastating as the Great Depression. Iran’s April 8 response called his bluff, laying down the terms for ending the conflict and opening the Strait of Hormuz. Oil-importing countries will need to compel U.S. and Israeli compliance with these terms in order to avoid an economic crisis.

We are seeing the economic version of what the 1960s called Mutually Assured Destruction (MAD).[1] The term referred to the military standoff that avoided the global Nuclear Winter that would have occurred if the world’s leading powers had used atomic weapons against each other. The possession of atomic bombs by both the United States and Soviet Union assured that they would not attack each other as long as the arms race maintained nuclear parity. The resulting balance of terror made the U.S.-Soviet Cold War relatively peaceful as far as fighting among the world’s most heavily armed adversaries was concerned. Their mutual restraint enabled America to wage its wars in Southeast Asia and Latin America without threatening world conflagration.

Today’s world is threatened with an economic kind of global collapse. Iran is defending itself against the prospect of U.S. and Israeli military attack by threatening to destroy OPEC’s oil and gas trade if its survival as a sovereign country is endangered. This threat is confronting the world with a fateful choice: Either countries will suffer a deep depression if Trump follows through on his threat to destroy Iran and seize its oil – in which case Iran’s retaliation will destroy OPEC’s energy trade on which many countries have become dependent – or they must actively move to prevent the U.S. attack.

In the 1960s, it was understood that an atomic attack by either of the major powers would not be survivable by them in meaningful terms. But today’s economic version of MAD has no such restraint on America’s floundering attempts to reverse the loss of its economic power that has left it with few major levers to exert control over other countries. Its main leverage is its ability to threaten countries with economic and financial chaos, by closing off the U.S. market to their exports and by blocking their access to oil and gas from Russia, Iran and (until just recently) Venezuela in its drive to force reliance on its own energy supplies and Arab OPEC oil under its control.

This threat of trade disruption has worked best against America’s closest allies. President Trump’s “Liberation Day” tariffs of April 2, 2025 imposed exorbitant levies that Trump offered to relax on the condition that other countries sign “giveback” agreements in the form of agreeing to impose trade and financial sanctions on America’s designated enemies, headed by Russia and Iran, and to shift their oil purchases to the United States.

This is not the first time that U.S. strategists have broken the rules of international relations that America itself had put in place in 1945 to shape the post-World War II economic order. Controlling 75% of the world’s monetary gold, it dictated creditor-oriented rules of international finance, and also rules of free trade as a means of breaking up Britain’s imperial preference trade restrictions. These rules prevented other countries from following protectionist policies to protect their agriculture and industry as the U.S. itself was doing. The United States also created a global military presence, promising to protect the world against the specter of Soviet military attack and to prevent countries enacting strong government controls or socialist policies that would pose an alternative to the U.S.-backed system of international finance, trade and private investments.

But now that the United States has de-industrialized and become debt-ridden, it has abandoned and indeed reversed these rules that served it eighty years ago. What U.S. officials call national security strategy is how to recover and maintain America’s control over other countries by weaponizing the dollar-centered financial system and its foreign trade. And instead of protecting other countries and their economic sovereignty, its attempt to enforce its dominance disruptively and militarily has become a threat to the entire world’s security. And unlike the balance of power that Mutually Assured Destruction had established, most other countries have not mounted any symmetrical check to U.S. bullying by isolating themselves from America’s weaponization of its trade and financial relations.

In the present crisis Iran’s main defense to the U.S. attack has been to block OPEC oil and gas through the Strait of Hormuz, and even to threaten to directly destroy OPEC production. These acts have confronted the world’s oil-importing countries with a crisis of their economies if they do not act to counter the U.S. threat to Iran’s sovereignty, which indeed is threatening their own economic and financial sovereignty.

America’s attempts to preserve its ability to weaponize the world’s oil trade

Prior to Trump’s tariffs, U.S. strategists had already used the threat of causing economic chaos by weaponizing its control of the international oil trade. Imposing trade sanctions against Iranian, Russian and Venezuelan oil producers left the United States able to deprive countries accepting its diplomacy of access to the oil and gas needed to power their factories, heat and light their homes and offices, drive their transportation, and produce fertilizer to increase their agricultural productivity. Oil became the world’s major trade choke point.

An early step in putting this control in place was the U.S. CIA’s and Britain’s MI6’s overthrow of Iran’s Prime Minister Mohammed Mossadegh in 1953 to prevent that country from regaining control of its oil. He was replaced by a brutal military dictatorship under the Shah, who protected U.S. control of Iran and its oil. After the Shia religious leadership led the successful fight to overthrow the Shah (mosques being one of the few places where public assemblies could not be prevented), the United States imposed crippling trade and financial sanctions against Iran in 1979.

Similar sanctions were imposed to isolate and injure Venezuela after its elected leaders sought to control their nation’s oil. And in February 2022 the United States imposed trade sanctions against Russia’s oil and gas exports to Western Europe and in September 2022 destroyed most of the Nord Stream pipeline. These attacks enabled America to force the former customers of Russia and Venezuela into reliance on U.S. oil and natural gas exports at much higher prices, crippling German and other European industry and chemical companies.

With Russian oil isolated by sanctions and America securing a quick military victory over Venezuela by capturing its President Nicolas Maduro and his wife on January 3, 2026, the only major source of oil to be brought more directly under U.S. control was the Middle East (now and henceforth better referred to as West Asia). Arab OPEC countries account for some 20% of the world’s oil production, 30% of its oil trade and 40% of its trade in natural gas, and also one third of its fertilizer and half of the seaborne sulfur trade (necessary to make sulfuric acid for mining extraction of ores).

In 2003, General Wesley Clark spelled out the U.S. plans to install client oligarchies throughout West Asia by conquering seven countries in five years, first with oil-producing Iraq, Syria and Libya and finally to culminate with Iran. The intention was to control their oil and put it in the hands of U.S. companies. The economies and........

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