#anticipate : The Middle East’s Global Tripwire : wired for shock !
From Iran and Israel to Saudi Arabia and the UAE: how a Gulf rivalry and a few chokepoints bind Washington, Beijing, Istanbul and Moscow.
Think less “alliances” and more “plumbing.” In today’s Middle East, leverage flows through chokepoints: Hormuz, financial sanctions, and the logistics hubs that keep trade moving. The network view explains why Iran and Israel can trigger global ripples-and why Saudi–UAE rivalry matters as much as their partnerships, especially under the shadow of US security and China’s demand.
A drone strike, a ship seizure, a missile salvo-none of it has to close the Strait of Hormuz to shake the world. The moment insurers reprice risk, tankers reroute, and refiners scramble, a local security incident becomes an energy shock, then a market shock, then a political shock. That is the Middle East’s most consequential reality: the region’s strategic drama is tightly coupled to the global economy through a few critical routes and institutions. The chokepoints don’t just carry oil; they carry leverage. To see how power actually works across this system, it helps to stop thinking in bilateral “friend–foe” terms and start thinking like a network engineer.
A network lens: hubs, chokepoints, hinge nodes
In a network, hubs are nodes whose connections matter disproportionately-because they provide security guarantees, market access, finance, or critical technology. Chokepoints are narrow passages-physical (shipping lanes), institutional (sanctions and payment rails), or operational (airspace coordination)-where disruption cascades. And hinge nodes are connectors that keep flows moving between rival blocs, often by providing logistics, finance, and plausible deniability.
Using that lens, today’s architecture has three dominant patterns:
Two hubs: security remains largely US-centered, while trade and energy demand are increasingly China-centered.
One chokepoint: Hormuz is the system’s pressure valve—where Iran can create outsized global costs without winning a conventional war.
Adaptation under pressure: sanctions don’t stop flows so much as reroute them, deepening “workaround ecosystems”—especially in the Russia–Iran security-industrial loop.
Against that backdrop, Iran and Israel become more than adversaries; they become stress multipliers for a wider system run by hubs and chokepoints.
Spine #1: Two hubs, one chokepoint
The security hub: America is still the region’s operating system
Even after decades of “pivot” talk, the United States remains the Middle East’s most consequential security integrator: basing, command-and-control, intelligence, air defense interoperability, and resupply. A single example captures the structure: Qatar’s Al Udeid Air Base is described by Reuters as the forward headquarters for US Central Command and the region’s largest US base, with around 10,000 troops.
This matters because modern military capability is not a one-time purchase; it’s an ecosystem of training, spares, software, munitions, and doctrine. That ecosystem ties Gulf partners (KSA/UAE) and Israel—each in different ways—into US logistical and political decision cycles. The dependence becomes most visible in high-tempo conflict, when air defenses and precision munitions are consumed faster than peacetime procurement can replenish.
Israel is the clearest “hard link” in this network. The US–Israel 10-year Memorandum of Understanding covers $38 billion for FY2019–FY2028 (about $3.8B per year) in military assistance, anchoring Israel’s long-term modernization and procurement pipeline to US policy, budgets, and export licensing.
Interpretation: The US security hub creates deterrence and stability, but it also inherits entanglement risk: when Israel–Iran escalation threatens shipping or regional bases, Washington’s posture is pulled toward crisis management-even if it would prefer distance.
The commerce and energy hub: China is the demand center
China’s role is structurally different. Beijing is not the region’s main security guarantor; it is the demand-side gravity well. It buys energy, sells manufactured goods, builds infrastructure, and increasingly experiments with settlement mechanisms that marginally reduce exposure to Western financial chokepoints.
The Iran case shows the asymmetry. Reuters reported in mid-2025 that China purchases around 90% of Iran’s exported crude, equating to about 13.6% of China’s total oil imports in the first half of 2025, with independent “teapot” refiners central to the trade and frequent relabeling/transshipment through third countries.
Interpretation: Iran’s export revenue becomes unusually exposed to China’s demand, shipping access, and enforcement pressure; China’s exposure is broader and more substitutable-except where geography forces dependence.
The chokepoint: Hormuz turns regional conflict into global pricing
That geography is the Strait of Hormuz. The US Energy Information Administration estimates that in 2024 and early 2025, flows through Hormuz represented more than one-quarter of total global seaborne oil trade and about one-fifth of global oil and petroleum product consumption; roughly one-fifth of global LNG trade also transited the strait in 2024.
EIA also estimates that 84% of crude/condensate and 83% of LNG passing Hormuz went to Asian markets in 2024, with China, India, Japan, and South Korea the top destinations.
Pipeline bypass capacity helps-but only partially. EIA estimates about 2.6 million b/d of Saudi and UAE pipeline capacity could be available to bypass Hormuz in a disruption scenario, and notes the UAE’s 1.8 million b/d pipeline to Fujairah as a key route-still far below the strait’s scale.
Interpretation: Hormuz is Iran’s asymmetric lever because it links the two hubs: the US must keep routes open for security credibility; China must keep them open for economic continuity. The Gulf states sit in the middle-earning revenue from flows they cannot fully reroute.
If you did not read it yet
thinkletter #64 - #Polycrisis #Unwar #Chokepoints #FutureOfPower #Geoeconomics #PolycrisisGame #Energy #Flux
Thinkletter #64 - March 17, 2025
Spine #2: Hinge nodes and sanctions friction
Sanctions are not a wall; they are system friction
Sanctions rarely “stop” trade cleanly. More often they raise the cost of doing business: fewer banks will touch a payment; fewer shippers will insure a route; more documents must be laundered through intermediaries; more parties fear secondary exposure. The cumulative effect is a drag on the sanctioned state—and a new form of leverage over everyone in the chain.
US Treasury has emphasized expanding tools that create secondary sanctions risk for foreign financial institutions that support Russia’s military-industrial base, illustrating how enforcement targets connectors, not only principals.
The UAE as a hinge node: powerful—until it becomes a point of failure
Hinge states thrive because they provide high-trust logistics and finance in a low-trust environment. The UAE—by virtue of shipping, re-export, financial services, and geographic placement—has become a quintessential hinge node, which also means it faces pressure when enforcement tightens on transshipment and third-country enablement.
Interpretation: In network terms, hinges are “high betweenness centrality” nodes: they don’t have to be the biggest economy or the strongest military to matter. When they are squeezed—through compliance actions, designation campaigns, or reputational shocks—the disruption propagates far beyond the original target.
Alternative rails: not a dollar replacement, but meaningful at the margin
Financial fragmentation is the second kind of chokepoint politics. The trend is not that the dollar disappears; it is that some corridors become marginally more resilient.
An EY report summarizing Chinese sources notes that CIPS (China’s Cross-Border Interbank Payment System) processed RMB 175 trillion in 2024, up 43% year-on-year, reflecting sustained growth in RMB settlement infrastructure.
PBOC reporting also documents large and growing CIPS transaction values in 2024.
Interpretation: This does not eliminate sanctions leverage, but it can reduce it at the margin-especially for sanctioned trade that can tolerate complexity, opacity, and higher transaction costs.
Spine #3: Adaptation under pressure
Russia–Iran: a sanctions-adaptation loop hardens into structure
The most visible adaptation loop links Russia and Iran: battlefield demand, sanctions constraints, and technology transfer converge into a security-industrial corridor.
Reuters reported Ukraine’s claim that Russia had launched thousands of Iran-developed Shahed drones during the war and that reports indicated Russia was also manufacturing them domestically using Iranian technology.
The International Institute for Strategic Studies describes how Iran began supplying Shahed-131/136 one-way attack UAVs in 2022 and how the relationship evolved toward domestic Russian production.
Meanwhile, the relationship is being formalized politically. Iranian government sources published the text of a Comprehensive Strategic Partnership signed on January 17, 2025; Russia’s Foreign Ministry has also referenced the agreement’s entry into force.
And cooperation spans “dual-use” domains like space: AP reported Russia launched three Iranian satellites into orbit in late 2025, highlighting the broader strategic tie.
Interpretation: This is what adaptation looks like when it becomes durable. Sanctions pressure pushes partners into deeper technical interdependence-precisely because their alternatives are limited.
OPEC+: economics as a geopolitical backchannel
Not all leverage is military. Oil coordination remains a strategic instrument—and a diplomatic channel. OPEC’s “Declaration of Cooperation” formalized the OPEC+ framework that underpins production coordination between Saudi Arabia and non-OPEC producers including Russia.
Interpretation: OPEC+ is a stabilizer (prices and planning) and a backchannel (ongoing bargaining). It can align Saudi and Russian interests in ways that periodically diverge from US preferences, reinforcing the “two hubs” reality: Washington may anchor security, but it does not fully control market governance.
Israel in this network: a security-sensitive tech node
Israel is tightly coupled to the US security hub, but it is also economically integrated with China-under a growing security filter. China’s Ministry of Foreign Affairs reports $22.7B in China–Israel trade in 2024.
Israel’s Institute for National Security Studies notes that China remained Israel’s largest goods import source in 2024 and that China’s share of Israeli goods imports was substantial.
At the same time, Israel has institutionalized scrutiny. Israel’s government describes an advisory mechanism to evaluate national-security implications of foreign investment; UNCTAD and Israeli security-policy analysis date the creation of this committee to October 30, 2019.
Infrastructure highlights the tension: Israel granted Shanghai International Port Group a long concession to operate Haifa’s new Bay Terminal starting in 2021, a deal that became emblematic of the “economic upside vs strategic exposure” debate.
Interpretation: Israel’s position is not “choose China or the US.” It is: capture trade gains while ensuring the security hub (the US) does not view economic integration as strategic vulnerability.
Russia–Israel: deconfliction as a relationship
Even amid deep strategic mistrust—especially given Russia–Iran ties—Israel and Russia have maintained operational channels to avoid accidental clashes in Syria. Reuters reported in 2015 on the establishment of a “hotline” and related coordination mechanisms.
Interpretation: Networks preserve functional links even when political alignment fails. Deconfliction is not friendship; it is plumbing.
What to watch: early indicators before the network snaps
If you want leading signals rather than hindsight, watch the places where the system is most coupled:
Hormuz risk premium: shipping advisories, insurance rates, AIS disruptions, naval posture changes.
Sanctions targeting connectors: new designation waves focused on intermediaries and finance.
Settlement fragmentation: visible growth in RMB/CIPS volumes and corporate/bank compliance notices.
Russia–Iran tech deepening: evidence of scaled UAV production and dual-use cooperation.
Israel’s security filter tightening: investment screening decisions and infrastructure scrutiny.
OPEC+ cohesion signals: messaging and policy moves anchored in the Declaration of Cooperation framework.
WHAT IF NOT: the predictable failure modes
A “partial Hormuz shock” becomes a global economic shock. You don’t need a full closure—risk premiums and delays can do it, given Hormuz’ share of global seaborne oil and LNG flows.
Sanctions enforcement escalates into connector whiplash. If secondary sanctions risk rises sharply, hinge nodes over-correct (banks refuse broad categories of trade), fragmenting trade finance and rerouting flows into more opaque-and brittle-channels.
Russia–Iran deepening becomes a durable workaround bloc. Expanded UAV ecosystems, formal treaty frameworks, and dual-use cooperation can increase resilience for both—while raising the sophistication and scale of their deterrence and gray-zone options.
Oil market governance becomes more politically brittle. If geopolitical strains spill into production coordination, volatility rises at precisely the moment shipping and security risks are elevated.
The underlying story is not “multipolarity” as a slogan. It’s a specific architecture: US security hub + China demand hub + Hormuz chokepoint + sanctions/payment chokepoints + hinge nodes that keep flows moving—until they don’t.
Conclusion: the enduring shape of the system
The Middle East’s interdependence is not “multipolar” in the abstract. It has a shape. The US is still the security hub. China is the demand hub. Hormuz is the physical chokepoint. Sanctions and payment systems are institutional chokepoints. Hinge states-especially the UAE-keep flows moving until enforcement or escalation turns them into points of failure. And under pressure, states adapt: Russia and Iran are building a workaround ecosystem that makes both more resilient in some ways—and more interdependent in others. That is why the biggest risk is rarely a single headline event. It is the cascade: when security incidents become shipping risk, shipping risk becomes price risk, and price risk becomes political risk—faster than diplomacy can dampen the shock.
Sources.