Dr. Ahmed Moustafa, Director & Founder, Asia Center for Studies & Translation, Egypt

Whenever U.S. administrations speak of the “military option” against Iran, public attention tends to focus on combat capabilities, advanced weapons systems, and alliance structures. Yet economists and energy analysts argue that the more pressing question is no longer whether the United States can wage another war, but rather whether the global economy can afford one.

After years of persistent inflation, supply chain disruptions, the war in Ukraine, and mounting public debt across advanced economies, the economic environment surrounding any large-scale confrontation with Iran differs fundamentally from that of previous Gulf conflicts.

Analysts increasingly contend that modern warfare is measured not only by the number of aircraft carriers, fighter jets, or precision-guided missiles deployed, but also by a nation’s capacity to finance prolonged military operations, secure reliable energy supplies, and preserve domestic political and economic stability.

The Strait of Hormuz: The World’s Strategic Chokepoint

The Strait of Hormuz remains one of the world’s most strategically significant maritime corridors, carrying a substantial share of global oil and liquefied natural gas exports from the Gulf.

Energy experts warn that even a temporary disruption to shipping through the Strait could immediately affect crude oil prices, maritime insurance premiums, freight costs, and ultimately food prices, inflation, and electricity markets across the globe.

Although energy markets possess mechanisms to absorb short-term disruptions, analysts caution that a prolonged interruption would place considerable pressure on energy-importing economies and increase uncertainty across global financial markets.

Are Strategic Oil Reserves Enough?

The United States and several industrialized nations maintain strategic petroleum reserves designed to cushion short-term supply disruptions during major crises.

However, energy specialists note that rebuilding these reserves following their use in recent years requires both time and substantial financial resources. More importantly, they argue that strategic reserves are intended to mitigate temporary shocks rather than replace sustained commercial oil supplies during an extended geopolitical crisis.

Economists therefore caution against viewing emergency stockpiles as a long-term substitute for stable global energy flows.

The Price Tag of War

According to estimates published by several U.S. research institutions, a large-scale military confrontation could cost anywhere from tens to hundreds of billions of dollars, depending on the duration and scope of military operations.

The financial burden extends far beyond direct defense expenditures. It could include:

Higher global energy prices.

Rising shipping and maritime insurance costs.

Disruptions to international trade.

Declining business investment.

Increased inflationary pressures.

Higher government borrowing and debt-servicing costs.

Economists argue that these cumulative effects would ultimately be felt by consumers on both sides of the Atlantic, particularly if the conflict coincided with a broader slowdown in global economic growth.

America’s Domestic Political Calculus

The political landscape in Washington appears far less unified today regarding another major overseas military engagement.

Congress continues to debate the constitutional limits of presidential war powers, while a growing number of lawmakers advocate stronger congressional oversight before authorizing prolonged military operations.

Meanwhile, many segments of the American public have become increasingly sensitive to the economic costs of foreign interventions, particularly amid persistent inflation, elevated household expenses, and concerns over the federal debt.

Political analysts suggest that any prolonged conflict could quickly evolve into a defining domestic political issue, regardless of which party controls the White House.

NATO Faces a Complex Equation

Within NATO, member states confront widely differing economic and political realities.

Although most allies have significantly increased defense spending in recent years, they continue to grapple with sluggish economic growth, elevated energy costs, inflationary pressures, demographic challenges, and the substantial investments required for the energy transition.

Analysts believe these structural differences could complicate the Alliance’s ability to sustain a prolonged military commitment should another major regional crisis emerge.

Ukraine and the Reassessment of Military Power

The war in Ukraine has demonstrated that modern conflicts are determined not solely by battlefield superiority but also by industrial capacity, manufacturing resilience, logistics, and supply-chain security.

The ability to sustain ammunition production, replace military equipment, and maintain uninterrupted defense supply chains has become as strategically important as technological superiority itself.

Defense experts argue that these lessons are prompting Western governments to reassess their readiness for any future protracted conflict.

The East: Growing Cooperation Amid Strategic Complexity

Meanwhile, recent years have witnessed expanding political and economic cooperation among Iran, Russia, and China, alongside varying forms of engagement with North Korea.

Analysts caution, however, that these relationships should not necessarily be viewed as a formal military alliance. Rather, they reflect converging strategic interests in selected economic, diplomatic, and security domains, particularly in response to Western sanctions.

Sanctions have also encouraged several of these countries to expand trade using national currencies while deepening cooperation in energy, infrastructure, advanced technology, and financial systems.

Economics and Technology: The New Strategic Battleground

Many experts argue that today’s competition between East and West extends well beyond conventional military power.

Artificial intelligence, semiconductor manufacturing, critical minerals, supply-chain resilience, cybersecurity, and technological innovation have emerged as central pillars shaping the future global balance of power.

While the United States and its allies seek to preserve their technological leadership, China and its partners continue investing heavily in indigenous innovation and reducing dependence on Western technologies.

Is There Any Winner?

Most economists agree that a major military confrontation in the Gulf would impose significant costs on all parties, albeit unevenly.

Higher oil prices could generate short-term gains for some energy exporters, yet they would simultaneously weigh on global growth, dampen investment, and increase inflationary pressures across major economies.

Financial markets could also experience heightened volatility as investors seek safe-haven assets amid growing geopolitical uncertainty.

Conclusion

Current economic and geopolitical indicators suggest that any large-scale military confrontation with Iran would carry risks extending far beyond the battlefield itself.

The central strategic question is therefore not merely which side possesses greater military capabilities, but which can sustain the economic, political, and strategic costs of a prolonged conflict.

At a time when the international system is undergoing profound transformation—and when competition over technology, energy, industrial capacity, and economic resilience is intensifying—many analysts argue that effective crisis management and de-escalation may ultimately prove far less costly than testing the limits of military power in one of the world’s most strategically sensitive regions.

Reference:

• U.S. Energy Information Administration (EIA) – World Oil Transit Chokepoints.
• International Energy Agency (IEA) – Oil Market Report.
• Congressional Research Service (CRS) – War Powers Resolution.
• Brown University – Costs of War Project.
• International Monetary Fund (IMF) – World Economic Outlook.
• Stockholm International Peace Research Institute (SIPRI) – Military Expenditure Database.
• International Institute for Strategic Studies (IISS) – The Military Balance.
• NATO – Defence Expenditure of NATO Countries.
• World Bank – Global Economic Prospects.
• OECD – Economic Outlook

Dr. Ahmed Moustafa Director & Founder, Asia Center for Studies & Translation, Egypt

Twenty-two years after Istanbul hosted NATO’s leaders in 2004, the Alliance has returned to Turkish soil, this time to the Beştepe Presidential Complex in Ankara, for a summit that arrives not as ceremony but as reckoning. The 36th NATO Summit, convened July 7–8, unfolds against a backdrop few of its architects in 2004 could have imagined: a Ukraine war grinding into its fifth year, a Middle East still smoldering from a direct US-Israel war with Iran, an American president openly questioning the value of the Alliance he is attending, and a host nation, Türkiye, that has quietly become indispensable to almost every crisis on NATO’s agenda.

Türkiye’s Moment: From Junior Partner to Power Broker

Hosting a NATO summit has always been a statement of strategic weight. But Ankara 2026 is different in kind. Türkiye arrives not merely as host but as leverage. Its defense-industrial base — anchored by companies like ASELSAN, which has attracted reported interest from global capital including BlackRock, with US Ambassador Tom Barrack said to be facilitating contacts and BlackRock’s Larry Fink having met President Erdoğan earlier this year — has positioned Türkiye as a rising node in NATO’s push for defense-industrial self-sufficiency. The Ankara Summit’s dedicated Defence Industry Forum, held alongside the political summit, underscores this: Türkiye is no longer simply a NATO member on the alliance’s southeastern flank but a manufacturing and innovation hub the Alliance now needs.

This is Erdoğan’s leverage point. As European allies scramble to meet the 5% GDP defense-spending pledge agreed last year, with 3.5% earmarked for core defense and 1.5% for resilience and infrastructure, Türkiye has positioned Ankara as a “delivery checkpoint” — a moment to translate commitments into contracts, and contracts into Turkish industrial gain. Analysts covering the summit have openly asked whether the gathering represents collective security or, in effect, the largest commercial handshake in Turkish defense history.

The Russia-China Question: Hedging in Plain Sight

Türkiye’s balancing act is not new, but it has rarely been more visible. Even as Ankara hosts NATO’s leaders, Foreign Minister Hakan Fidan met his Russian counterpart in Moscow only weeks earlier, part of a pattern of parallel engagement that Ankara has never fully abandoned since the Ukraine war began. Türkiye continues to occupy a unique lane inside NATO: a member state that supplies Kyiv with Bayraktar drones while keeping Black Sea diplomatic channels to Moscow open, and one that has deepened economic and energy ties with both Russia and China without triggering the kind of alliance discipline applied to smaller members. For Ankara, NATO membership and multi-alignment with Moscow and Beijing are not contradictions to be resolved but assets to be managed simultaneously — a posture that gives Turkish diplomats outsized room to maneuver at exactly the summit meant to reaffirm collective unity.

Ukraine: Sustaining a War Without an End

The degraded state of the Ukraine war looms over every session in Ankara. NATO is expected to affirm a pledge of roughly €70 billion in military equipment, assistance, and training for Ukraine in 2026, with allies committing to sustain at least equivalent levels into 2027. Yet the summit convenes amid reports that Italy has been resisting parts of the Ukraine funding language in the draft communiqué, exposing cracks in what NATO officials insist remains a “unity summit.” President Trump is scheduled to meet Ukrainian President Volodymyr Zelenskyy on the sidelines, following recent phone calls in which Trump suggested renewed prospects for a negotiated peace — even as fighting continues largely unabated and Zelenskyy has publicly flagged what he considers European inaction.

Ankara’s Trade-Off Amid the US-NATO Rift Over Iran

The most consequential subtext of this summit may be the still-raw rupture between Washington and its allies over the Strait of Hormuz. Since the US-Israel war against Iran erupted in late February — triggered by the killing of Supreme Leader Ali Khamenei — Iran’s closure and periodic re-closure of Hormuz has convulsed global energy markets. When Trump called on NATO, China, Japan and South Korea to help secure the strait militarily in March, every ally declined; Germany’s defense minister flatly stated it was not Europe’s war. Trump responded by calling NATO’s refusal a “very foolish mistake” and describing the Alliance, without American backing, as a “paper tiger.”

That rift has not healed; it has merely gone quiet enough to allow a summit to proceed. A ceasefire and blockade-lifting memorandum signed in June eased the crisis, but Iran has since signaled it will impose transit fees on Hormuz shipping, with “special treatment” reportedly reserved for friendlier states — a policy Washington rejects as unworkable for any lasting deal. Strait security is now formally on this week’s NATO agenda, even though the underlying disagreement over burden-sharing on Iran was never resolved, only overtaken by events. This is the trade-off Turkish politicians are positioned to exploit: Ankara can offer itself as an indispensable interlocutor — bridging Washington’s frustration with European reluctance — while extracting defense-procurement access and diplomatic capital in return, precisely the kind of transactional leverage Erdoğan has cultivated throughout the crisis.

The Middle East Overhang: Syria, Lebanon, and a Widening Israel Rift

Türkiye’s regional posture will shape the summit’s Middle East undertone as much as any formal session. President Trump is set to hold a separate bilateral meeting in Ankara with Syrian President Ahmed al-Sharaa, the former rebel commander now leading Damascus. The meeting follows Trump’s repeated suggestion — first floated at the G7 — that Syrian forces could take on Hezbollah in Lebanon more effectively than Israel, a proposal al-Sharaa has consistently declined, insisting Damascus seeks only economic channels with Beirut, not a military role reminiscent of Syria’s decades-long occupation of Lebanon. The subtext is unmistakable: Washington is testing whether it can redirect regional security burdens away from an Israeli campaign in Lebanon that has produced significant civilian casualties, toward a Syrian government still consolidating power after Assad’s fall — a maneuver that would simultaneously ease pressure on Israel and open a new channel of US engagement with post-Assad Syria, independent of Iran.

Layered atop this is an open diplomatic rupture between Ankara and Jerusalem. Foreign Minister Hakan Fidan, in a CNN Türk interview days before the summit, described Israel’s policies and mindset as “a burden that humanity can no longer bear” and called for international sanctions, accusing Israel of perpetrating mass killing in Gaza. Israeli Foreign Minister Gideon Sa’ar branded the remarks “textbook incitement to genocide,” a charge Germany’s foreign minister also distanced himself from as unacceptable rhetoric, while President Isaac Herzog denounced the comments as antisemitic. Erdoğan, for his part, dismissed Israeli criticism as an attempt to deflect from its own conduct in Gaza. That this exchange erupted just as NATO’s Israeli-aligned members prepare to sit alongside Türkiye’s delegation adds a genuinely awkward undercurrent to an Alliance summit ostensibly focused on Russia and defense spending — and gives Ankara another card to play: positioning itself as the Muslim world’s most vocal NATO-member critic of Israel, a role with real currency across the Arab and Islamic world even as it strains Türkiye’s Western alliances.

The Palestinian Case and Arab Coordination

For Cairo, Islamabad, Doha, and Riyadh, the Ankara summit is being watched less for its Ukraine communiqué than for what it signals about regional alignment on Gaza and the Palestinian file. Egypt, Qatar, Pakistan, and Saudi Arabia have each played mediating or coordinating roles throughout the Iran crisis and its regional spillover — Islamabad brokered ceasefire talks during the Hormuz confrontation, while Qatar helped facilitate a Lebanon ceasefire alongside the United States and Iran. That same quartet’s coordination on Gaza reconstruction, Palestinian statehood diplomacy, and pressure against further escalation in Lebanon is likely to intensify in the summit’s aftermath, particularly if Fidan’s confrontational posture toward Israel hardens into a broader Turkish push to rally Muslim-majority states — inside and outside NATO — around a unified Palestinian position. Whether Ankara’s rhetoric translates into coordinated Arab-Turkish diplomatic action, or remains a unilateral Turkish gesture aimed at domestic and regional audiences, will be one of the more consequential open questions to emerge from a summit meant, on paper, to be about Russia and the Atlantic alliance — and that has become, in practice, a referendum on how far Türkiye’s ambitions now extend.

This analysis draws on reporting from NATO’s official summit documentation, Reuters, the Congressional Research Service, The National, The Jerusalem Post, Al Arabiya, and other outlets covering the Ankara Summit as of July 7, 2026.

As NATO leaders gather in Ankara on July 7–8 for the 36th summit, the official narrative remains undisputed: facing the threat of Soviet invasion, Türkiye entered the alliance through its heroic trial in Korea, thereby securing its safety. My study of more than one thousand documents from the Diplomatic Archive of the Ministry of Foreign Affairs of the Republic of Türkiye—recently opened to researchers—reveals that neither of the two primary pillars supporting this narrative rests on a documentary foundation. First: now-accessible Soviet archives reveal that Moscow never possessed an operational plan to invade Türkiye. Second: Türkiye did not enter NATO by taking refuge under a security umbrella, but by staking the blood of its own sons in the United States’ war in the Far East. And the heaviest, most enduring toll of this bargain was levied on a relationship that Ankara needs most today: China.

UN Turkish Memorial Cemetery, Busan

There Was No Invasion Plan: There Was Fear, Error, and Opportunism

First, let us correct the record on the Soviet question. The demands conveyed by Molotov to Ambassador Selim Sarper in June 1945—a military base on the Straits, and the retrocession of Kars and Ardahan—were real, and they represented a historic blunder of Soviet diplomacy; there is no defending them. Yet, the Soviet archives opened after 1990, along with Jamil Hasanli’s archival reconstructions in Azerbaijan, document a critical truth: Moscow never drafted an operational plan to seize Kars and Ardahan; the 1945 demands were a maximalist opening gambit, one which even the Kremlin itself saw little prospect of being accepted. Stalin’s retreat during the Straits Crisis of August 1946 was likewise the product of cautious calculation rather than military intent. These same archives reveal how reluctant Stalin was even in Korea: he systematically rejected Kim Il-sung’s requests to launch an attack throughout 1949, and when he finally gave his approval in January 1950, he did so on the strict condition that no major risks would be taken.

Ankara’s fear was genuine—a fear that had accumulated since the Molotov-Ribbentrop negotiations of 1939 and can be consistently traced through archival documents; to claim that the public was deceived by a manufactured threat narrative would be a disservice to the historical record. But the sincerity of that fear does not mean the response to it was wise. Washington turned the anxiety spawned by this egregious Soviet diplomatic error into the mortar for its own bloc architecture: it excluded Türkiye from NATO in 1949, and then set the price for cracking open the door. That price was Korea.

UN Turkish Memorial Cemetery, Busan

An Entrance Fee Paid in Blood

The archives document beyond a shadow of doubt that the Korean decision was not an act of UN idealism, but a clear trade-off. Bound by no treaty obligations, Ankara decided on July 22, 1950—after deliberations lasting less than a single day—to dispatch a brigade of 4,500 troops to the front under US command. Six days later, UN Permanent Representative Sarper publicly voiced the demand for entry into the Atlantic Pact; the minutes of his meeting with Secretary-General Trygve Lie explicitly articulate this expectation of reciprocity. As the documents demonstrate, the structural decision to admit Türkiye into the Atlantic system was effectively communicated to Ankara on November 1, 1950—that is, before the Battle of Kunu-ri, but well after Turkish blood had been placed on the bargaining table. The Turkish soldier—the Mehmetçik—was made to fight against the forces of a nation that posed no threat to Türkiye, on a peninsula where Türkiye had no national interests, all for the bloc consolidation of a superpower. To call this a success story is to write a panegyric not to those who shed their blood, but to those who sent them to shed it.

The Core of the Cost: China

The least discussed and most permanent consequence of this trade-off is the rupture with China—and herein lies the true tragedy of the story. For the two peoples pitted against one another were the standard-bearers of the twentieth century’s two great anti-imperialist struggles. As my own research demonstrates, the Chinese press of the 1920s and 30s—most notably the Shenbao—closely followed Mustafa Kemal’s Türkiye as the birthplace of the first victorious war of national liberation against imperialism, viewing Kemalist modernization as a source of inspiration for their own national awakening. A quarter of a century later, the children of these two peoples were firing bullets at each other at Kunu-ri and Kumyangjang-ni—on a front drawn by Washington that served the historical interests of neither.

Ankara’s anti-China engagement was not confined to the battlefield. While Britain recognized the People’s Republic of China in January 1950, Türkiye remained anchored in the American-led non-recognition camp. In February 1951, Türkiye was at the forefront of supporting the UN resolution declaring China an “aggressor”; in an environment where even Britain and the Dominions sought moderating formulas, Ankara aligned itself with the harshest stance, driven by a reflex—plainly legible in archival correspondence—to “appear on the side of the majority.” When a strategic embargo was being prepared against China in May 1951, Türkiye chaired the relevant committee. Even the “Chinese Ambassador” whom Foreign Minister Köprülü received in Ankara on the final day of December 1950 represented Taipei, not Beijing. The result: while bridges were burned with Soviet Russia, which had been among the first to extend a hand of friendship to Ankara during the War of Independence, relations with China—the other great nation of anti-imperialist struggle—were frozen before they could even begin. Türkiye would not recognize the People’s Republic of China until 1971. As a researcher living in China, I must add this: the Korean War—known in the Chinese memory as the “War to Resist America and Aid Korea”—is an integral part of China’s founding epic, and Türkiye’s role in that war is far more vivid in the historical memory of our Chinese interlocutors than we tend to assume.

The Other Legacy of the Same Alignment: The Xinjiang File

Another enduring consequence of this bloc choice was gestated during those very years. With the establishment of the People’s Republic of China in 1949, political figures who departed Xinjiang—led by Isa Yusuf Alptekin, the former secretary-general of the provincial government, and Mehmet Emin Buğra, a former provincial administrator—turned their gaze toward Türkiye. In 1952, the Ankara government issued a decree admitting thousands of Xinjiang emigrants arriving via Kashmir, and over the subsequent decades, Istanbul became the global epicenter of this diaspora. The Turkish public’s embrace of these people was rooted in a genuine sense of kinship, a sentiment that is not in itself open to criticism. What must be critiqued, however, is the coopting of this humanitarian issue into the bloc architecture of the Cold War: the diaspora movement was politicized within the ecosystem of the American-guided anti-communist networks of the era, becoming institutionalized as part of Türkiye’s anti-China alignment. Thus, an inherently legitimate bond of kinship was transformed into an instrument of great-power rivalry—giving rise to the most sensitive file between Ankara and Beijing today: an issue that Beijing interprets as a matter of territorial integrity, while Türkiye perceives it through the lens of kinship and humanitarian concern, making it the area where the two capitals find it hardest to understand one another. Contrary to popular belief, the roots of this file do not lie in the 1990s, but extend back to those three years when NATO membership was purchased with blood. Unless Türkiye learns to approach this issue not as a leverage point between its own conscience and its relations with China, but as a historical legacy that the two nations must discuss directly and honestly, it will remain vulnerable to the instrumentalization of this file by third parties.

1953: The Pretext Evaporates, the Dependency Remains

The final act of the story is the one least favored by the official narrative. Stalin died on March 5, 1953. On May 30, 1953, the Soviet government, in an official note to Türkiye, explicitly renounced its claims on Kars and Ardahan, as well as its demands for a revision of the Straits regime; it acknowledged that Soviet security could be ensured under conditions compatible with Türkiye’s sovereignty. In later years, Moscow would go even further through Khrushchev, admitting that the Stalin-era demands were a mistake and that this very error had driven Türkiye into the American alliance. In other words, the entire rationale for NATO membership was retracted in writing by its very source, a mere fifteen months after Türkiye joined. Yet membership was not retracted; the blood had already been spilled, the architecture of dependency had already been constructed, and the door to China had already been shut. The threat was temporary; the commitments, the bases, and the closed doors became permanent.

The Real Question for the Summit

The question that will not be asked in the Ankara summit hall, but which urgently demands an answer, is this: as a nation celebrates the seventy-fifth anniversary of a membership purchased by shedding blood on a front entirely divorced from its own historical struggle, against an invasion plan that never existed, when will it take stock of the doors that very membership closed in Asia? If Türkiye is today discussing an agenda that ranges from trade with China to the Middle Corridor, it is in fact attempting to repair a relationship that was sacrificed in 1950–52 for the account of a superpower. As the world is once again dragged into bloc politics, the lesson of history is clear: security acquired by offering blood to fuel the wars of great powers is not security at all, but a dependency whose price is paid across generations. For those who remember that anti-imperialism was the founding experience of this land, the most meaningful agenda for the summit should not be the expansion of NATO, but Türkiye’s resolve to forge relations on the basis of equality with all quarters of its own geography—including China.