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How the Iran War Reshaped the Global Landscape of Power

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18.06.2026

Ongoing reports and analysis

The geopolitical disaster authored by U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu has done far more than squander the dominant position both nations were in just three and a half months ago.

Their unprovoked and failed war against Iran has likely set in motion a sea change in global power balances—a shift that will leave both the United States and Israel relatively weaker in the months and years to come.

The geopolitical disaster authored by U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu has done far more than squander the dominant position both nations were in just three and a half months ago.

Their unprovoked and failed war against Iran has likely set in motion a sea change in global power balances—a shift that will leave both the United States and Israel relatively weaker in the months and years to come.

Trump is now a seriously diminished figure at home and around the globe, his world-beating bluster turned to ash and empty threats. For the foreseeable future, the projection of U.S. power will no longer be as ominous as it once was—not just in the Middle East, but in the Indo-Pacific and Europe as well.

The memorandum of understanding (MoU) signed this week is effectively a surrender document—for Washington, that is. Apparently, in exchange for doing nothing more than signing the MoU, agreeing to 60 days of talks, and opening up the Strait of Hormuz, the Iranians will gain financial concessions that would have been unthinkable a few months ago. These could include the release of at least some frozen or restricted Iranian funds and assets, as well as waivers available “immediately upon the signing of this MoU” for “the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.,” according to the MoU released by the Trump administration.

To sum up: The U.S. president gained nothing at all in his war—far less than nothing, actually—in return for spending tens of billions of dollars and costing thousands of lives, including at least 13 Americans killed. To win vague promises from Tehran, Trump did major damage to the newly inflation-plagued U.S. economy; betrayed his political base at home; seriously depleted the U.S. critical weapons supply; empowered China and heightened its relative stature; alienated U.S. allies; and weakened the Gulf states.

And all at the hands of a regime, the Islamic Republic of Iran, that only three and a half months ago was isolated and economically devastated. Thanks to the war, even a severely weakened Iran has now become a significant geopolitical player—one that will soon reap new financial windfalls. The regime in Tehran has established its legitimacy over 47 years of existence largely by adopting a martial everybody-is-against-us mentality; now it can boast that it has successfully stood down the global and regional superpowers.

A man crosses a street past a billboard depicting the Strait of Hormuz with a caption in Persian reading “Forever in Iran’s Hand” at Vanak Square in Tehran on May 25.Atta Kenare/AFP via Getty Images

And because of Tehran’s continuing ability to control the Strait of Hormuz and use it to extract concessions from Washington and the Gulf nations, Iran also enjoys leverage that it never had before over the region and the global economy.

The Iranians “now know the power of the strait,” said Reuel Marc Gerecht, an Iran expert and former CIA officer. “They’re probably going to use it to deconstruct the entire sanctions architecture that’s been set up since [former U.S. President] Bill Clinton.”

Trump managed to achieve this outcome by risking something that........

© Foreign Policy