Tracing the arc of capitalist crisis: war in the Middle East and prospects for resistance

Is there a geography of crisis?1 Does it have a physical location on the surface of the globe? American officials certainly thought so 50 years ago, designating large swaths of the Middle East and Afghanistan as an “arc of crisis” racked by wars and uprisings.2 Or does “crisis” have a personality and face? It is easy to see Donald Trump and Pete Hegseth as its embodiments: truculent, irascible, unpredictable and violent.

The crudest versions of “crisis as a place” just recycle racist (or more specifically Orientalist) stereotypes about bloodthirsty and primitive Muslims bent on fighting each other and destroying civilisation, hence triggering endless wars. “Crisis as a person” often reduces the volatility of the global system to a clash of egos. The argument here is that if we swapped out Trump, Hegseth, Benjamin Netanyahu for people more willing to stick within a “rules-based order” of liberal capitalism everything would work out fine.3

More sophisticated versions of these accounts take a step back from personalities in order to refer to ideologies and theories of government. For some right-wing commentators, there is a clash generated by “Islamism” as a theory and practice of state power. On the left, Zionism as ideology of Jewish supremacy and the assumed force behind the Israeli state’s genocidal urges sometimes stands in place of deeper explanations.4

This article starts from a different place. I will argue that the terrifying scale of the conflagration that has engulfed the Middle East from Beirut to Tehran and the Gulf as a result of the joint attacks by the United States and Israel on Iran and Lebanon cannot be explained without understanding the relationship between the attacks and the accelerating breakdown of the neoliberal capitalist order. The ruptures emerging in multiple locations, the protracted wars of conquest and annihilation are symptoms of a much deeper malaise rooted deep within the functioning of capitalism.

The war on Iran may have started as an attempt at “regime change” with B-52s. Yet, during the first two weeks, it quickly morphed into a war fought over and with economic infrastructure. The attention of the world’s media and traders on global commodity markets has been focused on damage to oil installations, refineries and data centres. Far from capitulating or collapsing into civil war, Iran’s military and political leadership responded to the assassination of the head of state, Ali Khamenei, by shutting down the Strait of Hormuz and threatening to send oil prices above $200 (£150) a barrel.5 The reasons for that are to be found both at the centre of the global system, where the US’s economic dominance is being challenged by China’s rise, and in the Middle East, where the last decade has seen intensifying competition between rising regional powers: Israel, Iran, the Gulf states and Turkey. At both levels—the global and the regional—the feedback loops between economic and military dimensions of capitalist competition are multiplying and accelerating.

Yet, wrapped up in the horror, there are still reasons for hope. The other face of this period of crisis is not the deepening fractures between nation states or religious sects but the potential for struggle from below. The primary focus of anti-war activism here in Britain must be to disrupt our own government’s role in aiding and abetting the crimes of the US-Israeli alliance against the peoples of Iran, Palestine, Lebanon and Yemen. However, that mass movement needs a radical current within it. Organising strikes and mass protests to disrupt the flow of weapons and commodities through the circuits of global capitalism is a far more effective way to bring the machinery of destruction to a halt than any drone or missile.

Farewell to “forever wars?”

It is a slightly surreal experience to re-read the Trump administration’s November 2025 National Security Strategy (NSS) document and the January 2026 National Defense Strategy (NDS) while bombs thunder down on Tehran and Beirut. TheNSS explains why the US should take a fundamentally different attitude to the region than in the past:

For half a century at least, American foreign policy has prioritised the Middle East above all other regions. The reasons are obvious: the Middle East was for decades the world’s most important supplier of energy, was a prime theatre of superpower competition, and was rife with conflict that threatened to spill into the wider world and even to our own shores.6

Today, two of these conditions “no longer hold”, the document claims, arguing that superpower competition has been replaced by “great power jockeying” and that the US as a net energy exporter no longer has the same pressing need to intervene directly in the region: “As this administration rescinds or eases restrictive energy policies and American energy production ramps up, America’s historic reason for focusing on the Middle East will recede.”7

US strategy focuses here on securing pre-eminence in other global arenas, particularly the areas that the US ruling class regards as its “backyard” in the Western hemisphere, through a reassertion of the Monroe Doctrine. This vision includes familiar praise for the role of Israel as a regional watchdog for US interests, in alliance with the Gulf states. The NDS states:

Israel has long demonstrated that it is both willing and able to defend itself with critical but limited support from the United States. Israel is a model ally, and we have an opportunity now to further empower it to defend itself and promote our shared interests, building on President Trump’s historic efforts to secure peace in the Middle East. Likewise, in the Gulf, US partners are increasingly willing and able to do more to defend themselves against Iran and its proxies, including by acquiring and fielding a variety of US military systems.8

The launch of military action against Iran in late February 2026 could be seen as an abrupt abandonment of previous promises to end “forever wars” and stop acting as the world’s policeman. Parts of the US president’s Make America Great Again movement have loudly denounced the attack as a betrayal (to an equally vitriolic chorus of counter-condemnation from Trump’s allies).9 However, important elements of the analysis of the role of the Middle East within global capitalism in the NSS and NDS are rooted in real changes in the global capitalist system to which the US ruling class is struggling to adapt. Shifts in the realm of industrial production have led to the rerouting of commodity circuits and the reconfiguration of global energy systems. This is not a change of how capitalism works at the very basic level but of where its most dynamic engine rooms are located. China has experienced a huge leap in its productive forces over the last two decades and, hence, needs to be placed at the centre of an analysis of these changes. State and corporate institutions that used to manage global capitalism during the neoliberal era have to adapt to these changes.

This is acknowledged by the NSS and NDS, which both make the revival of US military industries a key goal of overall US geopolitical strategy. However, the US has not simply outsourced industrial production to China. On the contrary, the expansion of digital infrastructure in the US and the rapid growth in energy demand and transmission required by the surging use of cloud computing and Artificial Intelligence (AI), in combination with US dominance in key technological products (such as advanced semiconductors), point to intensified economic competition as China closes the gap—not a general picture of deindustrialisation in the US.

Sibling rivalries turn nasty

In the Middle East, US officials and major Western companies are competing with China to enable a model of industrial growth focused on digital infrastructure, cloud computing, AI, biotech and battery manufacturing. For Trump and his regional allies, this will entail the creation of a cross-border zone of dynamic capital accumulation stretching from Palestine to the Gulf, built over the bones of Gaza’s dead.

As I have mapped out in previous articles for this journal in 2018 and 2024, the major middle powers in the region—Israel, the Gulf states (principally the United Arab Emirates (UAE) and Saudi Arabia), Iran and Turkey—have been locked in a cycle of economic and military competition that had reached an unstable equilibrium by the early 2020s.10 The military defeat of the US in Iraq after its disastrous intervention and occupation created a space into which the regional ambitions of these rivals expanded. This took the form of the expansion of Iranian influence into Iraq and the construction of the “Axis of Resistance” as a military and diplomatic alliance. It also encompassed Saudi and Emirati military adventures in Yemen after 2015 and disastrous meddling in Sudan after 2019. Turkey, relying on its “Blue Homeland” doctrine, asserted military and diplomatic power in the Eastern Mediterranean.

Where does the “model ally” of the US fit into this picture? Israel’s launching of a new wave of genocidal conquest had to wait until after the Israeli ruling class had gone through a protracted internal struggle. As part of this struggle, the architects of the apartheid system constructed through the Oslo peace process in the 1990s partially lost their grip on the state and the army, paving the way for the political ascendancy of the far right.11 Israel’s brutal assault on Gaza and its attacks on regional antagonists such as Iran, Hezbollah in Lebanon and the Houthis in Yemen, is not only driven by racist fantasies of eliminating Palestinian resistance within the territory that the Israeli ruling class claims as its own. It is also designed to weaken Iran’s influence and the confidence of its ruling class to intervene beyond its borders. That confidence, for example, contributed to the successful 2019 drone attack on Saudi oil installations, which in turn became a major factor prompting Gulf states to embrace the US-led agenda of “normalisation” with Israel.

Up until autumn 2025, this strategy appeared to be working. One of the turning points in the process culminating in the adoption of Trump’s “peace plan” for Gaza appears to have been the Israeli air strike on Hamas officials in Qatar on 9 September 2025. The attack was all the more shocking to the leaders of the Gulf states because they were participants with Israel in a US-led secret alliance, labelled the Regional Security Construct, designed to coordinate responses to military threats from Iran. According to leaked documents revealed by the Washington Post, the US Central Command (CENTCOM) coordinated a series of meetings and training events between Israel, Qatar, Bahrain, Egypt, Jordan, Saudi Arabia and the UAE in 2024 and 2025.12 CENTCOM connected the partners’ radar and sensor data to US systems and allowed them to view each others’ data with the aim of coordinating air defences in the event of an Iranian attack. Yet, the attack from within their own ranks went undetected: US Air Force lieutenant general Derek France explained to reporters that this was because those systems “are typically focused on Iran and other [areas] where we expect an attack to come from”.13 This behind-the-scenes alliance was clearly not one of equals, and the fact that military leaders from most of Palestine’s neighbours continued to participate as the genocide in Gaza escalated underscores the weakness of the Arab pro-Western states in the face of Israel. Preparation for “mopping up” Palestinian resistance forces in the wake of a ceasefire even formed part of training sessions organised through the Construct. A January 2025 event in Fort Campbell in the US even provided specialist training in tunnel destruction.

In parallel with the intensification of genocide in Gaza, Trump, Netanyahu and their cronies such as Tony Blair articulated an economic vision to sweeten the bitter pill of Israeli military domination for the other regional powers. As I have previously argued in my analysis of the political economy of Israel’s apartheid system, advanced manufacturing and digital economy have formed the most dynamic sectors of the Israeli economy since the 1990s.14 These sectors have largely been incubated through a symbiotic relationship between the US and Israeli military-industrial complexes going back to the 1970s. Massive digital infrastructure deals with US tech giants, including Microsoft, Google and Amazon, played a critical role in the Gaza genocide, creating the digitised mass assassination factory of Israel’s AI-assisted targeting systems.15 The Israeli government has even built advanced semiconductor manufacturing facilities a few miles from Gaza, perhaps aiming to create a “silicon shield” similar to the one constructed by the Taiwanese ruling class in an effort to make itself indispensable to the US.16 For Trump and Blair, Israel’s economic strengths in these areas are meant to underpin economic collaboration with the Gulf states and help build partnerships with other powers such as India.

What makes the situation more difficult is the increased military competition between the regional powers themselves, which is a partial consequence of relative US decline (and its leaders’ divided attention as other conflicts and arenas take priority). This means that Israel’s aggression against not only Palestine but also against Lebanon, Yemen and Iran makes the dreams of Israel as the lynchpin of a zone of economic cooperation between the Mediterranean and the Gulf look less likely to become reality than ever. A hyperaggressive, expansionist Israeli military is proving itself to be an agent of destabilisation, creating a new cycle of regional warfare rather than laying the foundations for Trump and Hegseth to implement the vision of US detachment from the Middle East’s problems as laid out in the NSS and NDS.

The Spartan paradox revisited

The intensification of the regional war triggered by the attack of the US and Israel on Iran in February 2026 is not the first time that the Zionist state has tried to force a violent reset in the military and economic balance between the middle powers of the Middle East. Just as Netanyahu casts Israel’s role as a “super Sparta” these days, Israeli leaders and their allies in the 1950s and 1960s projected a vision of Israel as a version of the ancient city-state, dominating the region by force of arms.17 The war unleashed by Israel in June 1967 against Egypt and Syria was crucial. For the first time, Israel acted unilaterally as a regional agent of US imperialism through territorial conquest and the destruction of the military capability of its nearest rival, Egypt. However, there was also an economic dimension to Israel’s watchdog role, using war as a means to discipline and constrain the Egyptian state. Under Gamal Abdel Nasser’s leadership, Egypt was attempting to industrialise using a model of capitalist development inspired heavily by the experience of the Soviet Union. Writing in the immediate aftermath of Israel’s victory in 1967, Tony Cliff pointed out the tragic, unresolvable contradictions at the heart of Israel’s role as a military outpost for the Western powers:

Israel is not a colony suppressed by imperialism, but a colon, a settler’s citadel, a launching pad of imperialism. It is a tragedy that some of the very people who had been persecuted and massacred in such bestial fashion should themselves be driven into a chauvinistic, militaristic fervour, and become the blind tool of imperialism in subjugating the Arab masses.18

The Egyptian ruling class moved from being a competitor to an ally of Israel and the US within the course of the following decade, but other rival states soon emerged. Ironically, the rise of these powers was partially a consequence of the profound effects of the 1967 war on oil markets. The war spurred the emergence of the Organisation of the Petroleum Exporting Countries (OPEC). This cartel of national oil producers challenged the dominance of the major Western oil companies and ushered in an era of wildly gyrating oil prices—something that would become a general feature of global capitalism—and supply shocks. The massive flows of petrodollars into the coffers of the Iranian and Iraqi states as a result of surging oil prices supercharged both bouts of state-led industrial and infrastructure expansion, and it intensified military competition between these two neighbours.

This is one of the reasons why the next round of wars aimed at a rebalancing of the regional system in the early 1980s involved, apart from expanded military action by Israel through the invasion of Lebanon, the eruption of a protracted war between Iraq and Iran, resulting in eight years of conflict affecting the whole of the Gulf. In the end, decisive intervention by the US in support of Saddam Hussein’s Iraqi regime tipped the balance against Iran. Since the 1950s, the US had favoured the Iranian monarchy as a complementary pillar of support for its regional architecture of domination alongside Israel’s emerging role. The overthrow of the Pahlavi monarchy in 1979 through a revolution both forced a recalibration of US strategy and created a space where the Israeli state could act with greater agency and impunity. Under the leadership of the Likud Party’s Menachem Begin, the Israeli army stormed across the border into Lebanon, obliterated tens of thousands of Palestinians and Lebanese in massive bombing raids and enabled massacres in the Palestinian refugee camps of Beirut by its far-right Lebanese Christian allies. Neither the massacre in the Sabra and Shatila camps in 1982 nor the genocide in Gaza since 2023 was able to eradicate Palestinian and Lebanese resistance to occupation and apartheid. The destruction of Beirut in 1982 sowed the seeds for a new wave of resistance movements, including the emergence of Hezbollah. Israel’s bombing campaign since 2023 has also demonstrated the futility of using missiles against organisations deeply rooted in a people fighting for their very existence.19

The structural similarities between the 1980s and the period since October 2023 extend far beyond the ideological affinities between Begin (who openly invoked the spirit of Zionism’s early 20th century prophet of genocide, Ze’ev Jabotinsky, as inspiration in a graveside speech in 1981) and today’s Israeli leaders.20 Like today, the early 1980s came at the end of a long period of global instability and structural crisis, where the two dominant world powers—the US and the Soviet Union—sought to address deepening problems in the post-war model of capitalism. As writers in the tradition of this journal elaborated at the time, the breakdown of the forms of state capitalism and the permanent arms economy, which underpinned the 25 years of capitalist expansion following 1945, created shock waves that rippled across the world.21

US state department officials saw this “arc of crisis” reflected in the dangers of war and revolution gripping the Middle East and Afghanistan at the end of the 1970s. The US ruling class would eventually emerge from this period victorious over its global rival in the Soviet Union through the imposition of new ways of organising capitalist production and managing relations between its allies and subordinates—through what we would later call neoliberalism. At the time, however, the US appeared under severe pressure. Its military was still reeling from defeat in Vietnam, which shook its confidence about putting American soldiers’ boots on the ground. Moreover, one of its trusted allies, the shah of Iran, was ousted through a revolution led by people who framed their victory as an anti-imperialist struggle and claimed they would put the question of solidarity with Palestine back at the centre of regional politics, 15 years after Nasser’s humiliating defeat.

Energy, automation and intensified competition

Intensified competition to produce machinery and infrastructure encourages the elaboration of gigantic shopping lists of oil and gas resources, “critical minerals” and “rare earths” ripe for looting by overreaching governments. However, similar to the period of “classical imperialism” between the 1870s and 1945, today’s motor of capitalist competition is not located primarily in the seizure of territory and the extraction of raw materials. The theoretical frameworks developed by Russian Marxists Nikolai Bukharin and Lenin to analyse imperialism in the early 20th century certainly documented both of these processes, but they also investigated the rapid growth of the means of circulation of people, goods and information, tracking how many kilometres of railways and telegraph poles were built, patterns in global shipping tonnage and fluctuations in trade volumes.22 Similarly, the way in which systems for the supply of energy to new clusters of machinery and workers were changing attracted their attention. Although it was still a relatively novel technology, electrification figured prominently in their analysis.23 They examined the frenzied race for technical dominance tracked in patent filings, the emergence of a technical research and development culture and the creation of specialised, professional disciplines tasked with raising productivity. Their writings explored the emergence of new corporate forms, the expanding role of the state in production, the growth of cartels and the domination of banking capital over industrial capital.24 A further key indicator highlighted by both Lenin and Bukharin was the consumption of energy by vast agglomerations of machinery as a way to visualise the concentration and centralisation of capital.25 Change in global circuits of energy commodities is today—as it was the case in Lenin and Bukharin’s time—primarily driven by changes to the capitalist system’s productive forces.

Since 2010, we have seen the dramatic reversal of around half a century of declining oil production in the US. This was not due to the discovery of previously unknown oil reserves but rather a technical and engineering breakthrough. The successful development of techniques and technologies of fracking and shale gas capture allowed the exploitation of reserves previously impossible to extract, and it catapulted the US back into the lead as the world’s largest oil producer and a huge net energy exporter.26 This leap in technical progress was dependent on US capacity to develop and manufacture highly-advanced, precision machinery (such as the polycrystalline diamond compact drill bits used at high temperatures when drilling geothermal wells) and capital-intensive methods of research and development. Much of this research was publicly funded from the 1970s onwards but came to fruition only in the 2000s.27

China’s energy production shows a similar trend over almost exactly the same period of time, but with a different fuel: coal. Battery-powered cars cruise the streets and 356 gigawatt (GW) of wind and solar capacity was built by the end of 2024 (nearly equivalent to the entire wind and solar capacity in the US). Yet, as Adam Tooze rightly notes, behind this story of China’s rise as an “electrostate” lies “the dirtiest thing we have ever done”.28 The catastrophic rise in coal production and the centrality of coal to China’s industrial progress is, like the US “revolution” in shale gas, one of the outcomes of intensive, state-directed investment in research and development at the technological frontier. Almost 100 GW of capacity from new large coal-fired power stations using “supercritical” and “ultra-supercritical” technologies able to heat coal at above 600 degrees and at high pressure began construction in 2024.29 This is the same technology the US now proposes to emulate, following Trump’s social media posts in which he salivated over the virtues of “beautiful clean coal”.30

The maturation of Chinese capitalism’s productive capacities during a period of profound crisis at the core of Western capitalism (principally in the US) has tipped the global economy into a new era of increasingly frenetic competition, with states flexing their muscles again at every point in the production process, from mining to semiconductor fabrication plants, from factory assembly lines to software labs.31 Data centres serving as AI production factories and hosts of cloud computing infrastructure are the most intense current objects of worship by both the Chinese and US ruling classes—although semiconductor fabrication plants come a close second place.32 It is no accident that these and other hi-tech manufacturing sectors feature prominently in patterns of foreign direct investment globally. A September 2025 report by consultancy firm McKinsey shows that since 2022, 75 percent of announcements about cross-border investment flows have gone into advanced manufacturing, AI infrastructure and energy systems.33

The flows of investment from US hyperscale digital companies, such as Amazon, Google and Microsoft, and their partners, among them OpenAI and chip designer Nvidia, into major projects in the Gulf is one sign of this. The first international deployment of OpenAI’s infrastructure platform Stargate will be in the UAE, with a 200 MW data centre planned to go live in 2026 (scaling up to 1 GW capacity in the future).34 Microsoft, one of the Stargate partners, has its own investments in the UAE’s G42 group and has secured crucial export licenses to ship advanced Nvidia chips for use in the data centres as part of $15 billion (£11.3 billion) worth of spending in the country between 2023 and 2029.35 Meanwhile, Amazon Web Services (AWS) announced a partnership with newly-created Saudi state-backed AI innovation company HUMAIN worth $5 billion (£3.7 billion) in May 2025, which will see AWS create a Saudi-based infrastructure region in its cloud services.36

Equally importantly, investments are flowing in the other direction—from the cash-rich Gulf states into a US economy, where an ever-expanding AI bubble is staving off recession.37 The White House claims that UAE companies have committed to investments and partnerships worth $2 trillion (£1.5 trillion) with US companies, including new aluminium smelting infrastructure and investments in critical minerals production.38 Trump also announced a suite of deals with Saudi companies in May 2026, which he said was worth $600 billion (£449 billion).39 As with all of Trump’s pronouncements, close reading often reveals some sleight-of-hand accounting to inflate the numbers, but it is clear there are significant flows of money passing between the US and the Gulf.

However, the idea that the Gulf in particular, and the Middle East in general, is dominated economically solely by the US is misplaced. Although financial flows between the US and the region are much larger than those between China and the region, the financial and physical footprint of Chinese capitalism has expanded significantly in recent years. Economic cooperation between Saudi Arabia and China has intensified under Mohammed bin Salman’s (MBS) de facto leadership—he signed up to 35 separate agreements worth $28 billion (£21 billion) during his 2019 visit to China. Meanwhile, Chinese investment in Saudi Arabia has played a key role in realising some of MBS’s Vision 2030 development plans, especially in the renewable energy sector.40 The UAE too has a history of technological cooperation with China, a factor causing concern among US officials, who, for instance, insisted that Emirati tech company G42 should dump its Chinese investments before authorising the transfer of high-specification AI chips.41 The intense competition between Chinese and US hyperscale cloud infrastructure providers over access to markets in the Gulf region and beyond can be seen in the cluster of existing and planned data centres in Riyadh. Now the Saudi capital is also home to data centres owned by the Chinese giants Tencent, Alibaba and Huawei, alongside US-based AWS, Microsoft and Oracle.42

What does this all mean for oil and gas from the Middle East? The region remains a central node in the global hydrocarbon economy and produces more oil than the US does.43 The most important effect of the insatiable appetite of China’s manufacturing sector for raw materials and power, and the urban growth and expansion of transport systems this has triggered, has been the reorientation of the vast bulk of Middle East oil and gas production towards Chinese markets. Most oil and gas to pass through the Strait of Hormuz, the bottleneck where the Gulf meets the Indian Ocean, flows east these days, bound for India and China.

The Chinese demand for oil between 2000 and 2019 added the equivalent volume to a second US entering the world market.44 However, the surge in oil exports was not primarily for fuel but instead driven by Chinese industry’s need for petroleum-based products as feedstocks for manufacturing. Reorientation towards these new markets has helped to stimulate the growth of the petrochemical industries of the Gulf, with countries such as Saudi Arabia emerging as dominant exporters of ethylene (an important feedstock for the production of plastics) to China. Since 2019, Chinese demand has shifted even more decisively away from fuel oil, gasoline, jet oil and diesel towards liquefied petroleum gas (LPG)/ethane and naphtha, driven by the growth of the Chinese petrochemical industry.45 Ethylene production within China is rapidly expanding, with the addition of more than 25 million tonnes per year, close to 50 percent of new global capacity.46

Gulf capital has played a vital role in the rise of this new manufacturing hub. As the ruling classes of the Gulf states have pushed for diversification away from oil and gas extraction into petrochemicals and other “downstream” oil products, cement and aluminium manufacturing, construction and tourism, they have positioned themselves at the intersection between globally significant flows of capital, commodities and people.47 The return of war to the region after 40 years sends shockwaves through the oil and gas sector, financial systems and manufacturing supply chains.

Iran’s crisis in global perspective

The missiles and drones bringing ruin out of the skies above Gaza, Beirut and Tehran, and the digital surveillance systems and data centres on which they depend, are products of these changes to the circuitry of global capitalism. Take the Iranian Shahed drone as an example. It is an ingenious confection of high and low-tech. Knitted together from hobbyist aeroplane motors, plywood and commercially available electronic components, it is an example of how innovation in the middle layers of the technological stack by the industries of a medium-sized regional power produces highly effective weapons the great powers are pushed to copy. On 4 March 2026, the US military announced triumphantly that it had deployed a cheap drone, the LUCAS, which it openly stated had been “reverse engineered” from the Shahed’s design.48 This does not tell us much about the technical genius of Iranian engineers (although the more perceptive Western military commentators do acknowledge that the drone represented a significant breakthrough). Instead, it demonstrates how in the context of protracted crisis, the consumer electronics industry—a breakthrough of the entire East Asian centre of capital accumulation—is now producing weapons of war on an unprecedented scale.49 As I wrote in 2024, the race to produce military drones in sufficient quantities to win wars today (as opposed to carrying out spectacular attacks over unprepared opponents for propaganda or psychological purposes) is determined by access to electronics assembly lines either through global supply chains or by armies developing their own local industrial manufacturing base.50

The contradictions of Iran’s civilian digital economy also provide a useful illustration of the challenges faced by the Iranian regime and its allies within the wider ruling class under the pressure of global trends in the creation of large-scale digital infrastructure for communications, commodity circulation and trade. These show the complex interplay between two dimensions: on the one hand, Iran’s desire to refresh and develop its social base by creating opportunities for new private sector capitalists to profit from the growth of digital infrastructure and services; on the other hand, the challenges the regime’s leadership faces when it tries to shut down the internet in order to contain growing discontent. Although “digital authoritarianism” (such as the use of new surveillance tools including deployment of facial recognition technologies through large-scale “smart” camera systems in big cities such as Tehran) is part of the picture, Iran’s digital economy is far more significant than simply being a device for information control and repression. Likewise, the use of smartphone apps and social media platforms has evolved beyond the patterns visible four to five years ago. Previously focused on usage for personal communications, sources of news, information and entertainment, they now play a key role in logistics and trade. According to estimates from the Iranian government’s E-Commerce Development, social media sites drove between $595 million (£445 million) and $833 million (£466 million) in sales during 2021 alone.51

Yet in January 2026, the Iranian government itself initiated a shutdown of mobile phone networks and internet access in response to mass protests triggered by economic grievances. The impact of the internet shutdown of January 2026 on Tipax, one of Iran’s largest private companies, with services similar to DHS and FedEx, showed the acute dilemma the regime faces. Processing 320,000 daily shipments before the shutdown, the company was reported to be handling only a few hundred afterwards.52 As Indranil Ghosh writes: “The economic costs of the blackout are staggering. Iran’s deputy communications minister pegged the daily losses at as much as $4.3 million [£3.2 million]. NetBlocks estimates the true cost exceeds $37 million daily [£27.7 million]. More than 10 million Iranians depend directly on digital platforms for their livelihoods”.53

Previously, the Iranian regime provided significant incentives to businesses building a “halal” digital economy infrastructure, including local versions of popular platforms and services for online shopping and delivery services, video-on-demand and ride-hailing platforms. Since Amazon and Uber cannot operate in Iran because of sanctions, local alternatives DigiKala and Snapp have gained a captive audience, and Aparat, a video-hosting platform, became one of the most popular websites in the country. In the case of private messaging apps, the regime offered grants of up to $780,000 (£583,900) to Iranian companies that succeed in growing their user base to over 5 million. Iranian users also faced higher costs when using foreign messaging apps, along with attempted government bans and restricted access so that these apps and websites can only be used through VPNs. Despite these difficulties, enterprise digital tools provided by Western platforms are widely used in Iran, and removing access to Slack, Google Meet, Jira and GitHub causes severe problems for a segment of Iranian businesses.54

The economic pain associated with the shutdown was particularly problematic for the regime because it has hit a constituency among private capitalists whose wealth was directly incubated by the regime itself through its digital economy strategy. This included the privatisation of state communications infrastructure into the hands of businessmen linked to the Islamic Revolutionary Guards Corps (IRGC) and the handing over of lucrative international technology contracts to elite figures close to the regime.55 Yet in 2022 and 2026, when the government turned off mobile phone networks in a bid to contain the protest movement, at least some of their owners seem to have put up resistance. During the 2022 Women, Life, Freedom uprising, the CEO of mobile phone network RighTel, known for his “unusually strong connection” with the regime, issued a sharp public rebuke for the reduction in bandwidth, demanding compensation and claiming that the operator had complied with all security measures.56 During the crisis of January 2026, the CEO of Irancell—Iran’s largest mobile network with 66 million subscribers—was sacked for failing to implement the shutdown order.57

This underscores the point that Iran is not simply caught in a geopolitical vice due to sanctions imposed by the US as punishment for opposition to its regional policies. The legitimacy and capacity of the ruling class is also collapsing under the weight of internal contradictions as social and political contracts enforced after the revolution of 1979 break down in response to cumulative waves of social and political protest.58 This is not to deny that sanctions in the longer history of antagonism with the US and its regional allies have damaged the Iranian economy. A comparison between the trajectory of Iran’s economic growth since the late 1980s and that of Turkey, a similar-sized economy in the same region, makes that clear. In 1990, on the cusp of a major wave of neoliberal restructuring of the region’s economies, Iran’s gross domestic product (GDP) per capita was 80 percent of Turkey’s—by 2024, that figure had fallen to 48 percent. Turkey has benefited from additional advantages, including proximity to Europe, preferential access to European markets and membership of NATO. Nevertheless, the punishing impact of sanctions has certainly impeded Iranian capitalists’ access to technologies, raw materials and markets, compared to their Turkish counterparts.

Iran’s oil and gas sector demonstrates a different but equally problematic set of contradictions for the regime. External pressures (which are not all of the US’s making) are becoming increasingly difficult to navigate. In this case, however, rather than cracks at the top of society, there is growing evidence of rebellion stirring from below that provides the most hope and potential for resistance. The oil and gas sector is dominated by the state—although ownership and control is highly factionalised and subject to competition between different segments of the regime. For example, the sections of capital managed through the IRGC dominate, while the role of the state oil company, the National Iranian Oil Company (NIOC), has been weakened. Oil exports function as a financial lifeline for the regime as the sector contributes around 23 percent of overall GDP despite sanctions.59 Keeping oil and gas flowing has been achieved through a variety of means, including complex shadow logistics networks to evade sanctions and offering heavy discounts to China, Iran’s most important customer still willing to regularly buy. Over 90 percent of Iran’s oil flows go there, and the regime is also reliant on selling through yuan-dominated accounts to trade, again as a result of US-imposed sanctions.60 The Chinese government has been stockpiling oil and is seemingly happy to benefit financially from Iran’s difficulties.61 The Iranian oil industry also faces problems of aging infrastructure, the depletion of older reserves and a severe lack of capital to invest in drilling and expansion into new sites.

Another major factor adding to the regime’s difficulty in sustaining its costly workarounds to the sanctions regime has been the relatively low prices of oil in international markets, driven by oversupply of oil globally over the past year.62 This feeds into the growing tensions inside the different segments of the Iranian capitalist class and limits the overall room for manoeuvre by those in charge of the state apparatus. Rystad Energy estimates that one third of revenues from oil exports was handed by the regime to the IRGC, reducing the percentage available to state oil company NIOC to around 10 percent compared to the 14.5 percent officially allocated. In an environment of relatively low global oil prices, NIOC is now unable to cover its costs.63

Needless to say, the leadership of the IRGC and the management of the NIOC do not produce any of this oil and gas themselves. That is the role of tens of thousands of workers who experience punishing physical conditions, such as extreme heat in the south of Iran, where new oil and gas fields are being developed. One of the key mechanisms the regime has used over the last decades to maintain the upper hand is the classic neoliberal tactic of divide and rule between permanent and casualised workers, giving each segment of the workforce different conditions, negotiating with them separately and weakening their collective ability to resist.

There are signs that regime control over workers in the oil and gas sectors is beginning to break down. Several waves of strikes erupted over recent years. A detailed account of sector-wide strikes and protests by oil and gas contract workers in August 2021 documents how the movement matured and developed compared to a smaller wave of collective action in 2020. A committee coordinated the strikes across 102 factories and refineries in 39 counties between 19 June and 11 July 2021, an expansion compared to the previous year’s strike wave, which involved 42 sites and 17 counties. The strike organisers created independent workers’ organisations:

through inventive means such as creating a coordinating umbrella organisation and holding local gatherings. In some cases, the workers invite authorities to present demands at their meetings rather than send labour representatives to the authorities. These meetings are important for sustaining the protests but also for cultivating a radical democratic culture from the bottom up.64

This is a huge achievement in a highly securitised industry in the context of a very repressive political system with little space for independent organising by workers. Around 10,000 workers took part in the 2021 strikes, and a strike in the South Pars field in November 2025 showed the potential for the movement to become much larger, with up to 15,000 taking part. The Association of Gas Industry Workers’ Unions organised the strike and was careful to position it as independent of foreign interests. Organisers spoke about their opposition to imperialist intervention and their solidarity with Palestinian, Yemeni and Lebanese struggles for liberation.65 The demands raised were similar to those driving the 2021 wave, focusing on better wages, protection from extreme heat and substandard housing. Striking workers are well aware that collective action can create a powerful bargaining position: “South Pars produces 40 percent of Iran’s income and 70 percent of the energy of the nation. So, it is an incredibly strategic place for workers to have power, and to be able to build a base to achieve our demands,” one of the workers told Drop Site News.66

The experience of workers in the Iranian oil sector is embedded in a longer-term trajectory of rising struggles over a broad range of economic questions and modest gains, of creating independent unions, or at least embryonic workers’ organisations and networks, out of the process of coordinating strikes. In the five years before 2020, episodes of collective action by workers made up an estimated 57 percent of the 2,183 protests documented by the state-controlled news agency Iranian Labour News Agency.67 Oil workers played central role in the Iranian revolution of 1978-9, which brought down the shah. The industry was the epicentre of a workers’ movement centred around the shoras, elected councils that exercised significant control within the workplaces and pointed the way towards a radical and democratic challenge to the capitalist state as a whole.68

However, the experience of the Woman, Life, Freedom uprising in 2022 shows that there is no automatic or linear progression from workers’ organisations leading protests over economic issues to them becoming embedded in the heart of a generalised political challenge to the state. As Peyman Jafari argues, the 2022 uprising had the potential to evolve in this direction, but the regime was relatively successful in keeping the leadership of the street protests separate from organised workers through a combination of incredibly brutal repression and selective concessions to blunt workers’ demands.69 The experience of the 1978-9 escalation of political protests and mass strikes against the shah’s regime also points to the importance of workers mobilising over economic demands in the context of widespread political grievances. Such mobilisation can help create the space for a shift towards workers raising their own overtly political demands.

For the immediate future, the current war might bury in the rubble prospects for reigniting resistance from below against both imperialist intervention and the Islamic Republic’s brutal leadership. The scale of violence meted out by the regime in response to the 8-9 January 2026 mass protests, initially sparked by economic grievances, had already suppressed the emerging mass movement. According to the Iran-based Human Rights Activists News Agency, by the beginning of February, nearly 7,000 people were confirmed to have been killed by the regime’s security forces, with another 11,000 cases under review.70 Pictures of body bags piled outside public buildings and hospitals and reports of mass arrests and executions leaked out despite the internet shutdown. Recovery of political confidence after a blow of this nature would be slow in any case. However, the barrage of US and Israeli bombs will further weaken the possibilities for its organised revival.

Prospects for resistance

The experience of Iraq in 1991 offers a stark warning for people who, while being bombed by the US, heed calls for rebellion by the very same power. A US-led military coalition forced Iraqi troops to withdraw from Kuwait, invaded by Saddam Hussein’s government in August 1990. Then, on 15 February 1991, US president George Bush famously called on Iraqis to “take matters into their own hands” and rebel.71 The regime and the main Iraqi opposition parties were not prepared for the popular uprising. Iraqi troops mutinied and the army began to disintegrate. Yet, the revolt was crushed as the US preferred a weakened, but stable Iraqi state, ignoring the cost to Iraqis who had dared to rebel.

This example underlines that the relationship between revolutionary mobilisations emerging from a society’s internal crisis, foreign interventions and wars is complex. Defeat in war may provide the trigger for the collapse of a government’s authority, while resistance to colonial occupation can take many forms, ranging from guerrilla operations to mass strikes. National and religious oppression also sometimes provides the spark—and the US is also seeking to weaponise the Iranian state’s history of repression of minorities for its own benefit, claiming to be working with Iranian Kurdish groups to launch a new armed struggle.72 The problem is that conditions of war and militarised repression make it harder to organise the types of collective action that inspire millions to genuinely “take matters into their own hands” and start making the world anew. “We do not need, nor do we expect, people to take to the streets,” Rebaz Sharifi, a commander with the Kurdistan Freedom Party told USA Today in an interview on 15 March 2026.73

Yet, it is precisely through participation in the struggle for their own liberation, through mass strikes and protests, that ordinary people bring about the downfall of authoritarian regimes. The development of Iran’s mass movement from below has been halted—at least for now—because of a combination of repression and US-Israeli bombardment. Iran’s rulers have also been an obstacle to developing similar forms of solidarity and organisation across borders in the Middle East. They intervened to prop up Bashar al-Assad’s dictatorship and crush the popular uprising in Syria after 2011, as well as stoking sectarianism and violence in Iraq.74 As the genocide in Gaza intensified, the Iranian regime’s military alliance, the Axis of Resistance, shrank rather than expanded, as its members were rarely able to act in concert against the better-armed Israeli military, whose backing by the US was never seriously under threat.

Iran’s brutal regime is also highly unlikely to play any role in inspiring a revival of strikes and protests in the other major country where an organised working class might begin to challenge the regional system spreading war and destruction on a colossal scale: Egypt. As massacres, war crimes and genocide have unfolded over the border in Gaza, Egypt’s streets have remained for the most part sullenly silent. The counter-revolution after 2013 has left a long shadow. For now, the collapse of the Muslim Brotherhood as the largest organised opposition force has made it more difficult for protests and popular organising in solidarity with Palestine to get off the ground.

However, once again, Egypt’s rulers are bracing themselves for another set of war-related shocks. Natural gas from Israel’s Leviathan field was shut off with the launch of the Israeli-US offensive, removing access to 15-20 percent of Egypt’s normal supplies.75 Egypt is relatively self-sufficient in oil for its domestic needs. Yet, the potentially high price spikes that could follow a prolonged conflict of drone and missile exchanges affecting Gulf oil and gas flows might hurt tens of millions who have already seen their living standards drop due to the Covid-19 pandemic and the war in Ukraine. Egypt’s economy had only just stabilised and recovery is highly dependent on injections of capital from the Gulf—now under threat as the UAE, Saudi Arabia and Qatar recalibrate their investment strategies to protect their own assets.76

Again, the experience of the aftermath of the 1967 war may be instructive here. For Egyptians in the Suez Canal zone, it was not a six-day affair, but rather a long war of attrition along the new frontline created by Israel’s occupation of the Sinai peninsula, punctuated by a partially successful Egyptian military counter-offensive in 1973 under Nasser’s successor, Anwar Sadat. For Sadat, crossing the Suez Canal was meant to act simply as leverage to secure better terms for full-spectrum surrender to the US’s emerging new world order. He signed up to the World Bank’s prescriptions for neoliberal reforms and flew to Jerusalem to make a deal with Begin. Egyptian workers, however, were less impressed by the trade-off. It is often forgotten that the Iranian revolution of 1979 was the highest expression of a regional wave of uprisings and waves of mass strikes that included Egypt. As strikes and protests revived at the end of the 1970s, a favourite chant lampooned Sadat: “Hero of the Crossing, where is our breakfast?”77

It is difficult to say whether the current round of war will pave the way for a similar region-wide moment of possibility once again. Yet, it is certain that the development of movements and organisations—however embryonic—with a politics of working-class solidarity at the heart of their anti-imperialism is the essential prerequisite for seizing that opportunity, if it occurs. The tragedy of 1979 was that Islamist movements, rather than the left, capitalised on the political and social crisis resulting from the shock and awe of 1967 and its aftermath. This was in turn a consequence of the fact that the mainstream of the Stalinist left in the region centred its politics not on the self-emancipation of the working class but on the sovereignty of the state.78 If anything is to be salvaged from the wreckage of the Islamist project, it should be to not make that mistake again.

The other conclusion flowing from where this article started is that instability in the core of the global system means that possibilities for ruptures carrying revolutionary implications are also growing in the major economies of Western capitalism. The “end of history” promised by Francis Fukyama during the collapse of the Soviet Union was just as much a mirage as Karl Kautsky’s claims that “ultraimperialism” would stabilise the world order at the beginning of the 20th century.79 Politically, the people in charge of the Western states have turned on their predecessors, denouncing the old, failed gods of the market, multi-lateral systems of international diplomacy steered by a beneficent Western liberal elite and transnational supply chains. At a global level, we see the desperate search for new objects of worship: vertically integrated production, a strong state, authoritarian personalities to lead it, fevered dreams of racial and religious supremacy and machine fetishism on an unprecedented scale.

This is why “regime change begins at home”, as the old slogan from the movement against the war on Iraq two decades ago put it. We need mass anti-war mobilisations to shut down the bases used as launch points for bombers devastating the Middle East. Trade unionists should take inspiration from the actions of Italian, Greek and Moroccan workers who refused to allow weapons and materials bound for Israel to pass. Organised resistance to the war machine also necessarily means taking on the growing far right: the same racists who want refugees to drown in the Channel are cheering on the bombs that shatter their homelands. Putting workers’ resistance to capitalism and imperialism at the heart of the anti-war, anti-racist and anti-militarist movements is the best form of solidarity we can offer all those resisting war, genocide and dictatorship in the Middle East.

Anne Alexander is the author of Revolution is the Choice of the People: Crisis and Revolt in the Middle East and North Africa (Bookmarks, 2022). She is a founder member of MENA Solidarity Network,
the co-editor of Middle East Solidarity and a member of the University and College Union.

Notes