Pravin Sawhney on the War America Lost, and What It Means for the Petrodollar

A memorandum written by the winner

Speaking to host Bushra Khanam Fahad on the Nous Podcast, defence expert and Force magazine editor Pravin Sawhney argued that the memorandum of understanding signed between the United States and Iran should be read for what it is: an agreement drafted overwhelmingly on Iran's terms. "If this were peacetime, both sides would gain equally — a win-win," Sawhney said. "This is not that. This MoU is being signed after a war Iran won, and it shows: every condition Iran wanted has been granted." He noted that Israel is not itself a signatory — Washington has taken on the responsibility, under the agreement, of restraining Israeli action, a commitment its ability to enforce is already being tested by continuing Israeli strikes on Lebanon.

Sawhney said pressure is mounting on President Trump domestically precisely because so much of the deal favours Tehran, since much of the American security establishment remains unwilling to accept that the United States could lose a war, let alone to Iran. That establishment, he argued, still thinks in terms of a unipolar world with America as the sole superpower, rather than recognising a multipolar order with three great powers — the US, China and Russia.

Why Iran doesn't need to fear Trump's threats

Asked whether renewed fighting was likely, Sawhney was blunt: "Iran need not be scared, for the simple reason that Iran has won the war." He argued Tehran holds two options regardless of what Washington does — it can end the current state of calm ("state of harmonious control," as he put it) whenever it chooses, and it decides independently whether or not to continue talks. Iran, he said, still has both military and economic options available; the same cannot confidently be said of Washington. A ground invasion, he noted, would require some 300,000 US troops built up over months, as in the 1991 Gulf War against Iraq — a very different, mountainous, forested terrain that favours Iranian defenders on their own soil, and a troop mobilisation that would require Congressional approval America's political climate makes difficult. That leaves Washington, in Sawhney's assessment, with only a naval blockade as a remaining option — one Iran's drones and long-range, accurate missiles could make extremely costly, including by threatening large American vessels.

He was careful to note Iran does not seek regional dominance for its own sake: citing repeated statements from Iranian Foreign Minister Abbas Araghchi calling for a "regional framework" that includes the withdrawal of external powers' forces, Sawhney said the shape of the deal — which explicitly requires American bases and troops to leave the region — reflects an aspiration for a security order built on mutual trust among regional states, not Iranian hegemony.

The petrodollar question

This is where Sawhney turned to the memorandum's furthest-reaching implication. The document requires American forces to withdraw from bases across ten countries in West Asia, five of them Gulf Cooperation Council states — Saudi Arabia, Qatar, Bahrain, Kuwait and the UAE — where some 60,000 US troops are currently stationed across 19 bases. "If that withdrawal happens as written," Sawhney said, "it means the petrodollar system will gradually come to an end. And if the petrodollar ends, the American economy weakens substantially." A weaker economy, in his analysis, cannot indefinitely sustain the roughly 750 military bases the US maintains worldwide — meaning, in his words, "the American empire will sink." He pointed to corroborating signals already visible: Japan, Washington's closest regional military ally, has been selling US Treasury bonds, and countries worldwide have been buying gold as confidence in the dollar as reserve currency erodes. "This isn't only about the war," he said. "It's about the credibility of what was considered the world's greatest power being defeated on the battlefield, and the capabilities tied to that status weakening with it."

Pakistan's leap into West Asia

Sawhney devoted considerable attention to what he called a geopolitical transformation for Pakistan. He traced its origin to the four-day India-Pakistan clash of May 2025 (referenced in India as "Operation Sindoor"), after which — he noted — a US Congressional report concluded that Pakistan had performed better than India in that clash. That assessment, in his telling, preceded a formal defence agreement between Pakistan and Saudi Arabia by the end of 2025 — the first formal defence pact between the two countries despite decades of informal military ties dating to the 1970s. Field Marshal Asim Munir was hosted for a one-on-one lunch at the White House by President Trump in June 2025.

From there, Sawhney said, Pakistan moved from facilitator to mediator in the Iran-US crisis, hosting the first round of contact between the sides in Islamabad on April 11, and ultimately becoming a formal signatory to the ceasefire memorandum — signed, he noted, as the "Islamabad MoU," with Iranian and American signatures alongside that of Pakistani Prime Minister Shehbaz Sharif as mediator. This, Sawhney argued, has effectively pulled Pakistan — a South Asian country — into the club of West Asian regional powers alongside Egypt, Saudi Arabia and Turkey. He credited this partly to Pakistan's military leadership: unlike Indian diplomats, he argued, Pakistani generals have long understood the diplomatic value of demonstrated military capability and are willing to publicly credit others — such as crediting Trump for the ceasefire and even proposing him for a Nobel Peace Prize — when doing so serves their interests, a pattern he traced back to General Jehangir Karamat's direct dealings with Washington after Pakistan's 1998 nuclear tests.

A foreign policy Sawhney calls broken

Turning to India, Sawhney argued the country's foreign policy has been mistaken for at least four years, rooted in a failure to recognise the shift to a multipolar world. Two great powers, Russia and China, sit on India's immediate periphery, he noted, and the geopolitics of trade, connectivity and power contestation now runs directly through the region — an opportunity he believes India is not exploiting. He was sharply critical of the government's handling of casualty disclosures from the 2025 clash with Pakistan, contrasting Defence Minister Rajnath Singh's parliamentary assurance that no soldiers had died with the subsequent, delayed emergence of names of six personnel killed — a pattern, he said, that echoed the delayed disclosure of an Indian helicopter downed by its own missile after the 2019 Balakot strikes.

On the question of why Narendra Modi did not attend Khamenei's funeral despite a personal invitation, sending instead the Bihar governor and a junior minister, Sawhney was direct: "because it would upset America, upset Israel." He argued India's foreign policy remains ideologically fixed — unable to normalise relations with either Pakistan or China because the ruling party's ideology treats both as adversaries by definition, and unable to reassess its closeness to Israel for the same reason. He noted the irony that India, once among the earliest votaries of a two-state solution for Palestine, now maintains close ties with a government the UN Commission's own report accuses of a "targeted killing" of over 20,000 Palestinian children — a friendship, he argued, less reciprocated than one-sided, given the US has offered India little of substance in return in recent years, even as figures like Vice-President JD Vance publicly praised Israel while omitting any mention of India as a comparable ally.

What China's rise means for the neighbourhood

Sawhney also flagged Bangladesh's decision to hand a stalled port infrastructure project to China after New Delhi failed to advance it, alongside deepening China-Pakistan and China-Bangladesh ties, as evidence that Beijing is becoming, in effect, a South Asian power in its own right rather than an outside actor — a reality he said India's foreign policy establishment still resists acknowledging, clinging instead to an inherited, colonial-era assumption of regional primacy. Both Russia and China, he added, played substantial roles — diplomatic and material — in backing Iran through the war, even as he insisted the war's victory belongs to Iran itself, and the broader shift in the global order to the Global South.

Asked whether India's citizens would bear the cost of this approach, Sawhney did not equivocate: "That's obvious. As long as this government and this foreign policy remain in place, expecting either prosperity or a greater voice for India in the world is not realistic."