A Note to the Reader
“I beseech you, in the bowels of Christ, think it possible you may be mistaken.”Oliver Cromwell, letter to the General Assembly of the Kirk of Scotland, August 3, 1650
Cromwell wrote those words to men so imprisoned by their own certainty that they could not see their defeat approaching from across the field at Dunbar. He was not asking them to doubt their God. He was asking them to doubt themselves, to entertain, even for a moment, the possibility that the universe did not arrange itself around their convictions.
Three centuries later, the mathematician and humanist Jacob Bronowski stood ankle-deep in the ash pond at Auschwitz and spoke those same words into a BBC camera. He was not making a theological point. He was making a scientific one and a moral one. “When people believe that they have absolute knowledge, with no test in reality, this is how they behave,” Bronowski said, his voice cracking. “This is what men do when they aspire to the knowledge of gods”. The ashes beneath his feet belonged to four million people, including members of his own family, all consumed by the machinery of men who had assigned a probability of one to their own righteousness and a probability of zero to their own fallibility.
It is no accident that Cromwell’s plea became a formal principle in Bayesian statistics, the very mathematics that underpins modern game theory. Cromwell’s Rule, as formalized by the statistician Dennis Lindley, states that one must never assign a prior probability of exactly zero or exactly one to any empirical proposition, because doing so makes the mind permanently immune to evidence. A prior of zero yields a posterior of zero regardless of what reality subsequently presents. No data, no battlefield result, no catastrophe can penetrate a certainty of one. The decision-maker who has concluded with absolute conviction that his adversary is primitive, that his technology is invincible, that his cause is just beyond interrogation, has not merely made a bad bet. He has mathematically disabled his own capacity to learn.
This is where we find ourselves.
“Never is hope so pure as in the certainty of loss.”Andrew Lytle, The Velvet Horn (1957)
Trump and Netanyahu are conducting their shaggy symphony of propaganda toward a twisted euphoria of false hope, the belief that they will shelter behind iron shields of technocracy and prosecute a surgical, one-directional war of missile strikes against defenseless, rudimentary Iranians. They have assigned a probability of one to their own invincibility and a probability of zero to Iranian capability. They have violated Cromwell’s Rule in the most consequential arena imaginable.
Unfortunately, the Iranians possess a large and diversified offensive missile and drone arsenal whose singular strategic purpose is to deplete the defensive missile inventories of Israel, the US forward bases, and, critically, the vulnerable oil refining, pipeline, desalination, and freshwater infrastructure of the UAE and Saudi Arabia. The arithmetic of this exchange is not a matter of opinion. It is a matter of mathematics. And mathematics does not negotiate.
What follows is an attempt to apply the dispassionate logic of game theory, from von Neumann’s minimax to Nash’s equilibrium to Schelling’s brinkmanship to Harsanyi’s Bayesian games, to the question of where this war is going. The formal mathematical and statistical arguments that underpin each of these frameworks are substantial and warrant their own treatment; I will develop them in follow-up papers for readers who wish to engage directly with the proofs and derivations. Here, the objective is to make the logic accessible and its conclusions inescapable.
Those conclusions are unpleasant. They are meant to be. Bronowski did not wade into that pond at Auschwitz to make anyone comfortable. He went there because someone had to close the distance between the push-button order and the human act.
I beseech you, reader, think it possible that the men who launched this war may be mistaken.
Executive Summary
On February 28, 2026, the United States and Israel launched a massive joint air campaign targeting Iran’s nuclear facilities, ballistic missile infrastructure, and senior leadership compounds. Within 72 hours, Iran’s supreme leader was dead, over a hundred schoolchildren were killed in an airstrike, the Strait of Hormuz was closed, and the Gulf Cooperation Council states were under drone attack. The architects of this war, blinded by hubris, corrupted by donor incentives, and trapped in Cold War-era military doctrine, appear to have blundered into a conflict whose underlying strategic logic, when subjected to rigorous game-theoretic analysis, reveals a near-certain trajectory toward American strategic defeat.
This analysis applies the formal frameworks of game theory, from John von Neumann and Oskar Morgenstern’s foundational utility theory through John Nash’s equilibrium, Thomas Schelling’s brinkmanship, John Harsanyi’s incomplete-information games, and Robert Axelrod’s iterated cooperation models, to explain why this war was launched, why it cannot achieve its stated objectives, and who will ultimately pay the price.
Part I: The Theoretical Arsenal, Game Theory’s Core Frameworks
Von Neumann, Morgenstern, and the Minimax Foundation
In 1928, John von Neumann proved the minimax theorem: in any two-person, zero-sum game, there exists an optimal mixed strategy for each player that minimizes the maximum possible loss. Von Neumann and Morgenstern’s 1944 Theory of Games and Economic Behavior expanded this into a general framework for analyzing strategic interaction, establishing that rational agents choose strategies to maximize expected utility under conditions of uncertainty. Von Neumann himself applied these models to the Cold War, treating the US-Soviet rivalry as a two-player zero-sum contest.
The Iran war, however, is emphatically not a zero-sum game. The destruction of Iran’s infrastructure does not translate into equivalent American gains; it translates into global economic disruption that harms all parties, including the aggressor. This fundamental misapplication, treating a complex, multi-player, non-zero-sum situation as if it were a simple two-player contest where “their loss is our gain,” constitutes the first catastrophic analytical error by US and Israeli planners.
Nash Equilibrium and the Tragedy of Rational Self-Interest
John Nash demonstrated that in non-cooperative games, there exist equilibrium points where no player can improve their payoff by unilaterally changing strategy. The classic illustration is the Prisoner’s Dilemma, where two rational actors, each pursuing their own advantage, end up with a mutually destructive outcome: both “defect” even though they would be better off cooperating.
The US-Iran war is a textbook case. The United States, Israel, Saudi Arabia, and Iran are locked in a multi-player Prisoner’s Dilemma where each party’s individually “rational” moves, striking first, retaliating harder, closing shipping lanes, produce a Nash equilibrium of mutual destruction. The equilibrium outcome is not “the US wins”; it is “everyone loses, but some lose more than others.” The Britannica’s model of arms-race dynamics makes this explicit: each player’s dominant strategy is escalation, yet the resulting equilibrium is worse for both than restraint would have been.
Schelling’s Brinkmanship and Credible Commitment
Thomas Schelling’s The Strategy of Conflict (1960) introduced the concept that a party can strengthen its negotiating position by deliberately worsening its own options, burning bridges, making public commitments, and tying its own hands. Schelling identified brinkmanship as “the art of pushing a conflict to the edge of disaster in hopes that the other side will blink first”.
Iran has executed a textbook Schelling commitment strategy. By framing the conflict as a religious jihad following the assassination of its supreme leader, by closing the Strait of Hormuz at enormous cost to its own economy, and by declaring total war with decentralized command, Tehran has credibly signaled that it will not “swerve.” In game-theory terms, Iran has removed the steering wheel in a game of Chicken. The question becomes whether Washington recognizes that no amount of bombing can compel surrender from an actor that has credibly committed to martyrdom over retreat.
Harsanyi’s Incomplete Information and the Bayesian Miscalculation
John Harsanyi’s 1967 framework for games of incomplete information demonstrated that when players are uncertain about each other’s “types,” their true preferences, capabilities, and resolve, they must form probabilistic beliefs (Bayesian priors) and update them as information arrives. Misestimating an opponent’s type leads to catastrophic strategic errors.
The US and Israel appear to have dramatically misjudged Iran’s “type.” They assumed a rational-materialist actor that would capitulate under shock-and-awe pressure, the same assumption that failed in Iraq, Afghanistan, and Vietnam. They underestimated the Shia eschatological dimension: for Iran’s religious establishment, this war is not a cost-benefit calculation but a sacred obligation. In Harsanyi’s framework, Washington assigned a high prior probability to the “type” of Iran that would seek a negotiated exit under sufficient pain, and a low before the “type” that would fight to national death. The evidence from the first four days suggests the prior was catastrophically wrong.
Axelrod’s Iterated Games and the Collapse of Cooperation
Robert Axelrod’s tournaments on the iterated Prisoner’s Dilemma established that in repeated interactions, the most successful strategy is Tit-for-Tat: cooperate first, then mirror whatever the other player did last. The strategy succeeds because it is “nice” (starts cooperative), “retaliatory” (punishes defection), “forgiving” (restores cooperation), and “clear” (the opponent understands the logic).
The United States has done the exact opposite. It defected first, launching an unprovoked attack. It offered no cooperative alternative. It provided no clarity on acceptable endgame conditions. And by killing the supreme leader, it destroyed the very counterpart with whom any future cooperation would need to be negotiated. In Axelrod’s framework, this is a strategy guaranteed to produce endless retaliatory defection from the other side, with no mechanism for returning to cooperation.
Part II: The Game of Chicken Over the Persian Gulf
The Classical Structure
The US-Iran war maps directly onto the Game of Chicken. Two players hurtle toward each other; each can swerve (de-escalate) or drive straight (escalate). If both swerve, both survive with face intact. If one swerves and the other does not, the one who swerves is humiliated. If neither swerves, both are destroyed.
The simplest description of the payoff structure runs as follows. If both sides de-escalate, the outcome is a draw: no glory, no catastrophe, status quo preserved. If the US escalates while Iran backs down, the US achieves its objectives at Iran’s expense, a large positive payoff for Washington and a large negative one for Tehran. If Iran escalates while the US backs down, the reverse holds, and American prestige collapses across the Middle East. If both escalate without limit, the outcome is mutual catastrophe: a destroyed Gulf, a broken global economy, tens of thousands dead, and no winner at any price.
The Cuban Missile Crisis, the canonical historical example, was resolved because both Kennedy and Khrushchev maintained back-channel communication and offered face-saving exits. The Iran war has neither. The United States killed its interlocutor and announced “regime change” as its objective. There is no off-ramp.
Iran’s Commitment Device: Martyrdom as Strategy
Schelling demonstrated that the player who can credibly commit to not swerving gains the strategic advantage in Chicken. Iran’s Shia theology of martyrdom, combined with the assassination of the supreme leader, functions as precisely such a commitment device. The surviving leadership has framed the conflict as a jihad, a religious obligation to fight to the death. Iran’s decentralized command structure means that even decapitating Tehran changes nothing operationally.
When one player removes its ability to back down, the rational response for the other player is to swerve. But the United States, driven by domestic political calculations and donor obligations, has also committed publicly to “regime change”. The result is what game theorists call a “commitment trap”: both players have made irreversible commitments, and the only remaining outcome is mutual catastrophe.
The Galvanizing Atrocity: 150 Schoolchildren
On the same morning the supreme leader was killed, an airstrike struck a girls’ primary school in southern Tehran, killing approximately 150 children. The Israelis claimed the school was adjacent to a military base and that an air defense missile went off course. The Iranians insisted it was deliberate. Given documented Israeli conduct in Gaza over the preceding two years, the Iranian account carries a grim plausibility that no amount of official denial can erase.
The strategic effect, however, is not in dispute. The deaths of those children functioned as an irreversible escalation signal, not only to the Iranian government but to every Iranian citizen. Whatever ambivalence might have existed among progressive, urban, Western-leaning Iranians about their own government evaporated in the images of dead schoolgirls. In game-theory terms, the atrocity collapsed the Iranian population’s preference distribution into a single peak: total resistance. It was the most expensive “accident” in the history of strategic miscalculation, because it eliminated the very internal dissent that “regime change” supposedly counted on exploiting.
Part III: The War of Attrition, Why the Math Destroys America
The Asymmetric Cost Function
A war of attrition is a game where two players incur costs over time, and the first to quit loses. The key variable is each player’s cost-to-persistence ratio. Iran’s costs are structurally lower than America’s across every dimension.
The drone-interceptor equation is the starkest illustration. Iran’s Shahed drones cost between $20,000 and $50,000 each. American and allied interceptors cost between $1 million and $24 million per unit, depending on type and procurement urgency. Analyst Kelly Grieco calculated that “for every $1 Iran spent on drones, the UAE spent roughly $20 to $28 shooting them down,” calling it “the core of Iran’s strategy”. The Economist likened the dynamic to “using Ferraris to intercept e-bikes”.
The numbers tell the story without embellishment. Iranian Shahed drones cost $20,000 to $50,000 each and are produced at an estimated 500 per day. US THAAD interceptors cost roughly $15 million each and are procured at roughly 12 per year under current contracts. The SM-3 interceptor runs $9 to $24 million per unit, with a delivery gap that will not close until April 2027. The Patriot PAC-3 MSE costs approximately $4 million per unit, and the US is scaling production toward 2,000 per year, a figure that still cannot match the rate of Iranian drone and missile output.
Secretary of State Marco Rubio himself conceded the arithmetic: Iran produces “over 100 missiles a month,” compared to “six or seven interceptors” the US can build monthly. The United States used approximately 25% of its entire THAAD stockpile during the 12-day war in June 2025 alone, over 100 interceptors expended in days against an arsenal that took years to build. The production pipeline will not close the gap until April 2027 at the earliest.
This is not a war the United States can win through attrition. Iran’s cost function is orders of magnitude lower, its production rate is orders of magnitude higher, and its willingness to endure pain is structurally greater due to religious conviction and existential stakes. The war of attrition has exactly one equilibrium: the higher-cost player quits first.
Bombing the Wrong People: The Targeting Paradox
There is a further irony so bitter it deserves its own heading. The US-Israeli air campaign is concentrated on Tehran and Iran’s major cities, following the “shock and awe” doctrine of decapitating urban command centers. But the Iranians most likely to support Western-style political change, the educated, progressive, cosmopolitan urbanites, live in precisely those cities. The people who will fight the United States to the death, the Shia militants and religious hardliners, live overwhelmingly in the rural and mountainous areas that the bombing campaign cannot effectively reach.
The targeting doctrine is therefore systematically destroying the constituency for the very outcome it claims to seek, while leaving intact and further radicalizing the constituency that will ensure endless war. In game-theory terms, this is worse than a random strategy. A random strategy would at least occasionally hit the right target. This strategy has a negative expected value: every bomb dropped on Tehran makes “regime change” less likely, not more. It is the strategic equivalent of shooting your own allies while handing ammunition to your enemies.
The Sunk-Cost Trap and Escalation of Commitment
Once engaged, the United States faces the classic escalation-of-commitment pathology, the tendency to invest further in a failing course of action because abandoning it would mean admitting that prior investments were wasted. The Vietnam War is the canonical case: the initial commitment of troops created a “sense of obligation to persist” even as evidence mounted that the war was unwinnable. The Concorde supersonic jet is the economic parallel: 27 years of losses before governments admitted the project was doomed.
The psychological dynamics are identical here. Every American soldier killed, every billion spent on interceptors, every diplomatic bridge burned becomes a sunk cost that makes withdrawal politically harder. Game theory is unambiguous: sunk costs are irrelevant to optimal future decisions. But human decision-makers, especially elected ones facing midterm elections, are not game-theoretically optimal.
Part IV: The Economic Payoff Matrix, Who Loses, How Much, and How
The Strait of Hormuz: A Chokepoint as a Weapon
The Strait of Hormuz carries approximately 20 million barrels of oil per day, roughly 20% of global consumption, and 15 to 20% of global LNG supply. Iran’s closure of the Strait is the single most devastating economic weapon available to any state on Earth. Oil prices surged 7% immediately and are projected to exceed $100 per barrel if the closure persists. Maritime insurance premiums for the Persian Gulf have risen 50%, with major providers issuing cancellation notices effective March 5.
The economic consequences radiate outward in concentric rings of damage.
Ring 1, the GCC states (existential threat): The GCC is, at bottom, an artificial construct of empire. These nations do not exist naturally. There is no food. There is no fresh water. Cities of millions were conjured into being by petrodollars, and they survive only so long as the pipeline flows. Saudi Arabia, the UAE, Qatar, Bahrain, and Kuwait derive 30 to 90% of government revenue from oil and gas exports. They import 80% of their food through the strait. They obtain 60% of their potable water from desalination plants that are trivially vulnerable to drone attack. The water stress numbers alone tell the story: Dubai operates at 17,000% of its sustainable water capacity; Bahrain at nearly 4,000%; Saudi Arabia at 883%; Egypt at 6,420%. The region hosts over 100 major desalination plants, and Saudi Arabia’s capital Riyadh had only three to four days of potable water reserves as recently as the First Gulf War. A $50,000 drone can disable a desalination plant serving millions. Ninety percent of Dubai’s population are expatriate foreigners. They will not stay to fight for a city that is not theirs. They will flee, and the economic model collapses with them.
Ring 2, Asia (severe shock): China depends on the strait for approximately 50% of its oil imports; India for 60%; Japan for a critical share that Prime Minister Ishiba has said would collapse the Japanese economy within eight to nine months. South Korea, Thailand, and the Philippines are also acutely exposed.
Ring 3, Europe (energy inflation): Having severed much of its Russian energy supply over the Ukraine war, Europe is newly dependent on GCC exports. Qatar’s LNG suspension has already sent European gas prices soaring. Extended disruption would compound existing inflationary pressures and force central banks into the impossible choice between fighting inflation (raising rates) and supporting growth (cutting rates).
Ring 4, the United States (the petrodollar circuit breaks): The most insidious damage may be to the petrodollar recycling mechanism that quietly underwrites American financial supremacy. GCC sovereign wealth funds collectively manage nearly $6 trillion, over 40% of the global total. In 2025 alone, Gulf funds invested $70 billion into the US economy, heavily concentrated in AI and technology companies. This petrodollar recycling, where Gulf states sell oil in dollars and reinvest those dollars into US securities, has been a structural pillar of US financial stability since the 1970s.
If GCC states can no longer export oil, they cannot generate petrodollars. If they face existential threats to water and food supply, they must liquidate foreign assets to fund survival. The resulting capital flight from US markets would be concentrated in precisely the AI and technology stocks that currently drive American equity valuations. Gulf sovereign funds have become “marginal price-setters” in US markets; their withdrawal would not merely reduce demand but could trigger cascading selloffs.
The Principal-Agent Problem: Who Actually Benefits?
Game theory’s principal-agent framework reveals a critical misalignment at the heart of this war. The American public (the principal) does not benefit from the conflict; 78% opposed the initial strikes. But the agents, the decision-makers who launched it, have private payoff functions that diverge sharply from the public interest.
The incentive structure, as documented in the public record: Saudi Arabia and Israel have invested heavily in the political infrastructure surrounding the Trump administration, $2 billion from Saudi Arabia into Jared Kushner’s private equity fund, and $250 million pledged by Miriam Adelson for a potential third Trump term. Trump’s personal calculus includes the possibility that a prolonged war could enable emergency powers, influence midterm elections, and create conditions to extend his presidency. The military-industrial complex profits from munitions expenditure regardless of strategic outcome.
This is a textbook principal-agent divergence: the agents who launched the war bear none of its costs and capture private benefits from its continuation, while the principals, American taxpayers, servicemembers, and the global public, bear all of the costs and receive none of the benefits. The agents have optimized their own payoff function, not the nation’s.
Part V: “Regime Change,” the Sanctimonious Vocabulary of Aggression
There is a phrase that deserves its own scrutiny, because it functions as both a strategic objective and a moral camouflage: “regime change.”
The United States and Israel deploy these words as though they describe a principled undertaking, as though the act of obliterating another country’s government from the air is a form of democratic service. The phrase borrows the vocabulary of self-determination, of liberation, of democracy, and drapes it over the brute reality of a war launched without a declaration of war by Congress, without authorization by the United Nations Security Council, without a vote by any democratic body in any participating country, and against a sovereign nation that had attacked neither the United States nor Israel.
The hypocrisy is structural, not incidental. The United States and Israel claim to act in the name of democratic values while circumventing every democratic process available to them. Seventy-eight percent of the American public opposed the initial strikes. The Chairman of the Joint Chiefs of Staff warned that the operation was ill-advised. Congress was not asked to vote. The democratic attributes and institutional safeguards that these governments invoke when lecturing the rest of the world were discarded the moment they became inconvenient.
“Regime change” is not a policy. It is a euphemism for the violent overthrow of a government that two foreign powers have unilaterally decided should not exist. When Iran or Russia or China support political factions in other countries, Washington calls it “interference in the democratic process” and imposes sanctions. When the United States does it with cruise missiles, it calls it “regime change” and expects applause. The word “regime” itself is doing work here: applied exclusively to governments the West wishes to destroy, never to its own allies, no matter how authoritarian. Saudi Arabia, a monarchy that beheads dissidents and dismembers journalists, is a “partner.” Iran, which holds contested but actual elections, is a “regime”.
Game theory has a name for actors who apply different rules to themselves than to their opponents: cheaters. And cheaters, as Axelrod’s iterated Prisoner’s Dilemma tournaments demonstrated, eventually face retaliation from every other player in the system. The global credibility costs of this war will compound for decades.
Part VI: The Fate of America’s “Allies,” GCC States as Expendable Pawns
The Vassal’s Dilemma
The GCC states face what might be called the Vassal’s Dilemma: a game where a weaker player has aligned with a stronger patron, only to discover that the patron’s strategy places the vassal in mortal danger. The Gulf monarchies allowed US bases on their territory, permitted Israeli and American aircraft to use their airspace, and maintained the petrodollar system, all in exchange for security guarantees. Now Iran is attacking those bases, destroying that infrastructure, and the “security guarantee” has proven to be a liability rather than an asset.
The game-theoretic structure is cruel. The GCC states cannot defend themselves against Iranian drone and missile saturation. They cannot compel the United States to protect them; the US cannot even protect its own bases, as Secretary Rubio effectively admitted. And they cannot switch sides quickly enough to avoid Iranian retaliation, because their complicity in the strikes is already established.
Dubai’s economic model, built on the premise of safety, neutrality, and Western capital attraction, is likely finished. “After what the Iranians did, it’s dead. You’re a wealthy Westerner; you’re not going to move to a place where it could be attacked any time by the Iranians”. The UAE absorbed 689 drone strikes in three days, with 44 impacting the country. An Amazon data center was hit. The aviation corridor through Gulf airspace, the world’s most efficient, has been severed.
Saudi Arabia’s Aramco, the world’s most valuable company, has already suspended operations at its largest domestic refinery after Iranian drone strikes. The kingdom’s grand diversification plans, NEOM, the Line, the tourism pivot, depended on the perception of stability. That perception is gone.
Bahrain: The First Domino
Bahrain deserves particular attention because it may be the first GCC state to fall. The island nation hosts the US Fifth Fleet, making it a primary Iranian target, but its deeper vulnerability is demographic: more than half of Bahrain’s population is Shia Muslim, yet the country is governed by a Sunni monarchy. Iran’s attacks on Bahrain are not merely military. They are designed to ignite a religious uprising among the Shia majority, who are now religiously obligated, following the martyrdom of the supreme leader, to commit jihad against the very government that rules them. If Bahrain’s Shia rise, the Fifth Fleet’s base becomes untenable, and the first pillar of the American military architecture in the Gulf collapses. The domino effect from there, through Qatar, Kuwait, and ultimately Saudi Arabia, follows a logic that game theorists would recognize as a cascade failure: each node that falls increases the probability that the next will fall.
The $5 Trillion Ultimatum
The GCC states will not suffer quietly. As their water, food, and economic viability degrade, they will present Washington with a binary ultimatum: either pay Iran an indemnity of approximately $5 trillion to cease hostilities, or send ground troops to eliminate the Iranian threat permanently. Neither option is remotely palatable. The first would constitute the largest bribe in human history, an admission that the war was a catastrophic mistake. The second would plunge the United States into a ground war against 88 million people in mountainous terrain, a prospect that every serious military analyst has identified as suicidal. The GCC has become a client that can blackmail its own patron, a game-theoretic inversion that the architects of the petrodollar system never contemplated.
Water as the Ultimate Vulnerability
The GCC’s dependence on desalination is not merely a vulnerability. It is an existential one. Desalinated water accounts for 90% of Kuwait’s supply, and similar proportions across the Gulf. There are over 100 major desalination plants in the GCC. Each is a static, above-ground, coastal target trivially reachable by a $20,000 drone. The Gulf Research Center and multiple independent analyses have concluded that a coordinated strike on desalination infrastructure would trigger a humanitarian catastrophe within days. Iran’s strategy does not require defeating the American military; it requires disabling water purification systems. The cost is negligible. The effect is existential.
Part VII: The Winners’ Table, Russia and China as Beneficiaries
The Multipolar Windfall
Every game produces winners and losers, and the US-Iran war is generating a windfall for the two powers the United States ostensibly sought to contain. Russia and China benefit through multiple, reinforcing channels, some immediate, some structural, some that will unfold over decades.
Russia: Strategic Vindication
For Moscow, the Iran war validates everything Vladimir Putin has argued for 25 years about the instability of a US-dominated unipolar order. Russian state media speaks with “striking confidence” about a potential American “defeat” that could trigger the “inexorable collapse” of the United States. More concretely:
- Oil revenue: Russian crude, already selling at discounts to attract Asian buyers, becomes dramatically more competitive as Gulf supply vanishes. Higher global oil prices directly increase Russian state revenue, partially offsetting sanctions costs from the Ukraine war.
- De-dollarization acceleration: Russia and China already conduct roughly 90% of their bilateral trade in national currencies. The disruption of petrodollar recycling accelerates the structural shift that BRICS has been pursuing, not by creating an alternative overnight, but by demonstrating the dollar system’s fragility.
- Strategic corridor preservation: Iran is the indispensable node for Russia’s International North-South Transport Corridor (INSTC), which saw record traffic in January 2026. Moscow has provided S-400 air defense systems, Su-35 fighter jets, and Rezonans-NE over-the-horizon radar to preserve this link.
China: The Patient Hegemon
Beijing’s strategy is subtler and arguably more consequential. China bought more than 80% of Iran’s shipped oil in 2025 at significant discounts. Rather than confronting the United States directly, which would risk its own economic stability, China is playing what Chatham House calls “the long game”.
- A weakened Iran becomes a more dependent Iran. Beijing can capitalize on Tehran’s isolation to deepen the 25-year Comprehensive Strategic Partnership, increasing Chinese economic and technological penetration on favorable terms.
- Energy architecture diversification. The war demonstrates the vulnerability of maritime chokepoints, vindicating China’s massive investment in overland energy corridors (Belt and Road) and pipeline infrastructure that bypasses the Gulf entirely.
- Technology transfer as influence. China has provided Iran with BeiDou-3 satellite navigation (replacing GPS), real-time intelligence from its 500-plus satellite fleet, anti-stealth radar systems, and potentially CM-302 supersonic “carrier-killer” missiles. This transforms China from economic partner into indispensable military-technological enabler, creating dependency without direct combat exposure.
- Normative precedent. The US assault on Iran, launched without UN authorization, without allied consensus, and with the explicit goal of overthrowing a sovereign government, establishes precisely the international norm that Beijing would invoke regarding Taiwan. If the model becomes “great powers enforce their security the way they see fit,” then Russia’s future offensives in Europe and China’s designs on Taiwan start to look less like world-historic ruptures and more like the grim continuation of a new normal.
The Credibility Floor
Both Moscow and Beijing face a critical test, however. Having positioned themselves as architects of a multipolar alternative, they confront what analysts call a “credibility floor,” the point at which passive support for Iran risks being read as strategic paralysis. If the Western-led coalition succeeds in dismantling Iran despite Russian and Chinese technological support, “the narrative of a ‘multipolar alternative’ collapses”. No Global South country will pivot toward a security architecture that fails its primary test.
The game-theoretic prediction is that Moscow and Beijing will escalate their support incrementally, not to the point of direct confrontation, but sufficiently to ensure Iran survives as a functioning state. Their optimal strategy is to keep Iran fighting at minimum cost to themselves while the United States bleeds resources, credibility, and economic stability. In game theory, this is a dominant strategy: it yields positive payoffs regardless of the conflict’s final outcome.
Part VIII: The Two Grand Strategies, Balkanization vs. Pax Islamica
Beneath the daily carnage, two long-term game plans are colliding, and the outcome of that collision will determine the shape of the Middle East for generations.
The US-Israeli Plan: Ethnic Fragmentation
The American and Israeli endgame is not merely to topple Iran’s government. It is to destroy Iran as a coherent nation-state. Iran is ethnically diverse: Persians dominate the center, but the borderlands are home to Azeris, Kurds, Baluchis, Arabs, Turkmen, and at least five other significant minorities, many of whom share more cultural affinity with neighboring countries than with Tehran. The strategy, never publicly announced but legible in the pattern of operations, is to fracture Iran along these ethnic fault lines, arm and finance the fragments, and set them against one another in a perpetual struggle over the country’s most precious and dwindling resource: water.
Iran’s water crisis is real. The country operates at 72% water stress, and Lake Urmia, once the sixth-largest saltwater lake on Earth, has nearly vanished, shrinking from a vast body of deep water in 1984 to a shallow remnant you can walk across today. The US-Israeli plan is to target dams, reservoirs, and power plants to accelerate this crisis, transforming the mountain fortress into a mountain prison where trapped populations turn on one another. In game-theory terms, this is a strategy of imposed negative-sum play: ensure that every faction inside Iran is locked in a war of all against all, so that none can ever reconstitute a unified threat. It is, as the analysis candidly admits, “a pretty evil plan,” which is precisely why it has never been announced.
Iran’s Counter-Strategy: Global Jihad and Pax Islamica
Iran’s response is symmetrically ambitious. The first tier is to rally the global Shia population, spread across Pakistan, Iraq, Bahrain, Lebanon, Yemen, and beyond, into an international jihad against the American empire. This is already underway. Shia populations have stormed American embassies in Pakistan and Iraq. Attacks on American diplomatic and military installations are multiplying across the Muslim world.
But the second tier is more radical still. Most of the Muslim world, Sunni as well as Shia, is governed by dictatorships that are clients of American empire: Saudi Arabia, Egypt, Algeria, and dozens more. These governments are deeply unpopular among their own populations. Iran’s grand strategy is to rally the Muslim masses, not just Shia but Sunni, against their American-backed rulers, overthrow them, and establish what amounts to a Pax Islamica: Iran as the leader not merely of the Shia minority but of the entire Islamic world, two billion people strong.
This is the true game-theoretic confrontation: balkanization versus unification, fragmentation versus consolidation. The US-Israeli plan requires that Iran’s ethnic minorities can be turned against one another faster than Iran can turn the Muslim world’s populations against their own governments. It is a race between two strategies of dissolution, and the arithmetic favors Iran, because Iran is fighting with a religious mobilization tool that costs nothing to deploy while the United States is fighting with bribes and weapons shipments that cost billions and generate resentment wherever they land.
The Ukraine Connection
Finally, both grand strategies are inextricable from the war in Ukraine. Europe, having severed its Russian energy supply, depends on GCC exports for economic survival. If the GCC collapses, Europe goes bankrupt, and its capacity to support Ukraine collapses with it. Russia cannot allow Iran to fall, because a defeated Iran means the American war machine turns toward Moscow next. The Iran war and the Ukraine war are not separate conflicts. They are two fronts of the same global confrontation, and the game-theoretic analysis must account for both simultaneously. A player who optimizes on one front while ignoring the other has not read the full payoff matrix.
Part IX: Probabilistic Outcomes, Where the Payoff Matrix Points
Short-Term (0 to 6 Months)
The immediate trajectory is governed by the war-of-attrition mathematics. The United States will continue air operations, expending munitions at an unsustainable rate. Iran will continue drone and missile saturation attacks against GCC infrastructure, US bases, and Israeli targets at a fraction of the cost. Oil prices will remain elevated, potentially exceeding $100 per barrel, inflicting inflationary pressure on every economy on Earth. The political pressure on Trump from rising gas prices, American casualties, and midterm vulnerability will intensify. The probability of ground troop deployment, which every analyst agrees would be catastrophic, rises as air power proves insufficient to overthrow a sovereign government. And the nuclear question, which no one in Washington wishes to discuss publicly, begins to surface: if the conventional war is being lost, does the calculus shift toward the unthinkable?
Medium-Term (6 to 24 Months)
The escalation-of-commitment dynamic takes hold. Having invested enormous political and military capital, the United States cannot withdraw without admitting failure, a game-theoretically irrational but psychologically predictable sunk-cost response. GCC states face a potential humanitarian crisis as desalination infrastructure degrades and food imports decline. Bahrain, with its Shia majority and exposed Fifth Fleet base, becomes the likeliest site of the first internal collapse. Capital flight from the Gulf accelerates, with sovereign wealth funds liquidating US holdings to fund domestic survival, producing exactly the financial contagion that the petrodollar system was designed to prevent. BRICS-aligned nations accelerate de-dollarization initiatives, not because they have built a fully functional alternative, but because the dollar system has demonstrated its vulnerability. Europe, caught between energy scarcity and alliance obligations, fragments politically. The Iran war and the Ukraine war begin to merge into a single, unmanageable crisis, as the energy and financial linkages between the two theaters become impossible to separate.
Long-Term (2-Plus Years)
The structural reordering is the most consequential outcome. If Iran survives as a coherent state, which the game-theoretic analysis strongly suggests it will, given its geographic defensibility, decentralized command, ideological cohesion, and external support from Russia and China, then the war will have accomplished the precise opposite of its intended effect. It will have demonstrated the limits of American military power against a determined regional adversary. It will have shattered the economic model of the GCC, undermining the petrodollar architecture. It will have accelerated the transition to a multipolar financial order. And it will have provided Russia and China with both the normative precedent and the strategic opportunity to consolidate their own spheres of influence.
Conclusion: The Minimax of Folly
Von Neumann’s minimax theorem counsels each player to adopt the strategy that minimizes their maximum possible loss: “hope for the best, prepare for the worst.” By that standard, the US-Israel assault on Iran is the antithesis of rational strategy. It maximizes America’s maximum possible loss: economic disruption, alliance fracture, military overstretch, domestic political crisis, and the acceleration of the very multipolar order it sought to prevent.
The game-theoretic evidence is unambiguous. The war was launched not because it was rational for the United States as a nation, but because it was rational for the specific agents, political leaders, donors, and ideologues whose private payoff functions diverged from the national interest. It cannot be won through air power alone, and ground invasion would be catastrophic. The war of attrition favors Iran at every level: cost, production rate, and willingness to suffer. The GCC states, America’s supposed beneficiaries, face existential threats to water, food, and economic viability. And the ultimate winners, Russia and China, need do nothing more than watch, provide calibrated support, and prepare to inherit the wreckage of a unipolar order that destroyed itself.
The payoff matrix was always visible. The tragedy is that the players who launched this game never bothered to read it.
Related reading
- The Nuclear Abyss: Theodore Postol’s Warning for Israel and Iran
- Analysis: The World’s Critical Supply Architecture Disrupted by the U.S. Attack on Iran
- The Last Blunder: How the US-Israel Attack on Iran Killed the American Empire's Operating System
- The Enemy We Made: Three Times Iran Extended Its Hand, Three Times America and Israel Answered with a Fist
