The Iraqi oil trap and its paradox: A rentier economy amidst geopolitical shocks

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In an economy dependent on oil exports, and with the disruption of crude oil tanker traffic through the Strait of Hormuz due to the US-Iranian war, the core of the problem lies not only in the volume of exports and the revenues generated from them, but also in how these revenues are managed, and in the amount of spending that depletes them. On September 22, 2026, Iraqi Prime Minister Ali Zaidi told The New York Times that Iraq had lost nearly $60 billion in oil revenue due to the war with Iran. For approximately two months, Iraq was unable to export 90% of its oil, while 90% of its economy depended on crude oil exports. Before June 2025, when the first round of the US-Israeli conflict with Iran erupted, the Central Bank of Iraq’s reserves had exceeded $110 billion, but by October 2026 they had fallen to less than $60 billion. Although Zaidi’s government managed to balance global polarization and geopolitical tensions during its first five months in office, the biggest problem was the i...

The Great Delusion: how the Iran War exposes the limits of liberal hegemony

 

By Dr. Pshtiwan Faraj

John Mearsheimer’s The Great Delusion offers a powerful framework for understanding liberal hegemony, nationalism, Ukraine, Iran and the return of great-power politics.

Few scholars have been as consistently willing to challenge the assumptions of Western foreign policy as John Mearsheimer. Long before Russia’s full-scale invasion of Ukraine, before the renewed confrontation with Iran, and before great-power competition once again became the organizing principle of international politics, Mearsheimer warned that the post-Cold War project of liberal hegemony was built on a dangerous misunderstanding of how states and societies behave.

His 2018 book, The Great Delusion: Liberal Dreams and International Realities, remains one of the most important critiques of the foreign-policy assumptions that dominated Washington and many European capitals after the collapse of the Soviet Union. Its central argument is brutally simple: the United States confused the temporary absence of a peer competitor with the disappearance of international power politics. That mistake shaped an entire generation of foreign policy.

In a recent conversation on the Peacemonger channel, Mearsheimer revisited the argument of The Great Delusion and its relevance to the increasingly unstable international system. His central warning remains that liberal hegemony was never simply a foreign-policy strategy. It was an attempt to reshape the international system itself—and, ultimately, the societies living within it. The consequences have been profound.

The Unipolar Fantasy

The collapse of the Soviet Union created something historically unusual: a world in which the United States possessed overwhelming economic, military and institutional power and faced no genuine peer competitor.

For Washington, this appeared to create an extraordinary opportunity.

Traditional balance-of-power calculations seemed increasingly obsolete. The United States could expand its alliances, promote liberal democracy, deepen economic globalization and construct international institutions around rules largely written in Washington and its Western partners. Mearsheimer describes this strategy as liberal hegemony.

Its objectives were ambitious. The United States would promote liberal democracy abroad, encourage economic interdependence and expand international institutions designed to integrate states into a rules-based order. The underlying assumption was that the more countries became democratic, economically interconnected and institutionally integrated, the less likely they would be to fight one another.

The intellectual optimism of the period was captured most famously by Francis Fukuyama's The End of History and the Last Man. Liberal democracy appeared not merely to be one political system among many, but the endpoint toward which history itself was moving.

The Soviet Union had disappeared. Communism had collapsed. Global capitalism was expanding. Western institutions were spreading. It was tempting to conclude that history had chosen a winner. But international politics had not disappeared. It had simply gone temporarily quiet. 

Liberalism Abroad, Illiberalism at Home

The central paradox of Mearsheimer's argument is that an aggressive attempt to spread liberalism abroad can eventually undermine liberalism at home. His formulation remains striking: “Liberalism abroad leads to illiberalism at home.” The reason is structural.

A state attempting to transform foreign societies requires increasingly ambitious military, intelligence and political institutions. The further Washington moved into Afghanistan, Iraq and other conflicts, the more the United States had to mobilize extraordinary national-security powers.

The liberal state began developing increasingly illiberal instruments in the name of protecting liberalism.

This contradiction became particularly visible after the attacks of September 11, when the United States entered a period of prolonged war, expanded surveillance, counterterrorism operations and increasingly intrusive national-security policies.

The original promise was that American power would create a safer and more democratic world. Instead, the United States became entangled in conflicts that demonstrated the limits of military power when confronted by societies possessing strong national, religious or political identities. Vietnam had already demonstrated the problem. Iraq reinforced it. Afghanistan reinforced it again. And Iran represents perhaps the most consequential contemporary test of the same proposition.

The Buzzsaw of Nationalism

For Mearsheimer, the common denominator in these conflicts is not ideology. It is nationalism. This is perhaps the most important lesson of The Great Delusion.

Western policymakers repeatedly assumed that military superiority could overcome political resistance. But military power cannot easily defeat a population that believes it is fighting for national survival.

People will tolerate extraordinary suffering when they believe the alternative is the loss of their sovereignty, identity or homeland.

This is why nationalism remains one of the most powerful political forces in the world.

It explains why technologically superior armies can struggle against weaker opponents. It explains why occupations become politically toxic. It explains why regime-change projects frequently produce outcomes radically different from those envisioned by their architects. A government can destroy military infrastructure. It cannot easily bomb nationalism out of a society. That distinction has repeatedly been ignored.

Trump’s Realist Contradiction

Donald Trump presents an especially complicated case. Trump's political rise was partly fueled by rejection of the assumptions associated with liberal internationalism. His “America First” rhetoric emphasized national interest, sovereignty, burden-sharing and skepticism toward endless foreign interventions.

At the level of strategic doctrine, this represented a significant departure from the post-Cold War consensus. Yet Trump's actual foreign policy has repeatedly contained a contradiction.

He has rejected liberal hegemony as an ideological project while sometimes embracing the underlying assumption that American power can force other societies to accept Washington's preferred political outcome. Iran is the clearest example.

Trump does not appear interested in exporting American-style liberal democracy to Tehran. But using military force to destroy a regime's strategic capabilities or attempting to compel political transformation through overwhelming pressure still rests on a familiar assumption: that external power can fundamentally reshape another society. That is not necessarily liberalism. But it is still a form of strategic hubris.

The problem is not whether Washington has enough bombs, aircraft, sanctions or intelligence assets. The problem is whether those instruments can produce the political outcome Washington wants. History suggests extreme caution.

Ukraine and the Return of Great-Power Politics

The Ukraine war represents another critical part of Mearsheimer's argument. For years, Western policymakers treated NATO expansion as an expression of the liberal international order. From Washington's perspective, expanding the alliance eastward meant extending a community of democratic states and strengthening European security.

From Moscow's perspective, however, NATO expansion represented the steady movement of a rival military alliance toward Russia's borders. These two interpretations could coexist for a time. Eventually they collided.

Mearsheimer has long argued that the roots of the Ukraine conflict cannot be understood without considering NATO expansion and the broader attempt to incorporate Ukraine into the Western institutional system.

His argument is controversial because it challenges a dominant Western narrative in which Russian aggression is treated as the sole or primary explanation for the conflict.

But whether one accepts every aspect of Mearsheimer's interpretation or not, one point is difficult to dismiss: great powers react to changes in the strategic balance around their borders.

The return of great-power competition means Washington can no longer assume that its institutional preferences will automatically be accepted by other major powers. The unipolar moment is over. 

Russia is back as a major military actor. China has emerged as the most significant long-term challenger to American power. And middle powers increasingly possess enough economic and technological capability to resist Western pressure. The international system is becoming more competitive precisely when many Western institutions were designed for a period of overwhelming American dominance.

Liberalism Versus Nationalism

At the heart of Mearsheimer's argument is a deeper philosophical conflict between liberalism and nationalism. Liberalism emphasizes universal individual rights. Nationalism emphasizes the political community.

Liberalism asks what rights an individual possesses regardless of nationality. Nationalism asks who belongs to the political community and who has the right to determine its collective future. Neither principle is inherently incompatible with the other.

The United States and Britain demonstrate that liberal democracy can exist inside powerful nation-states. The problem begins when liberal universalism becomes detached from national political realities. That tension can be seen in debates over immigration, sovereignty, European integration and the growing backlash against transnational elites.

The rise of figures such as Viktor Orbán is not simply an ideological rebellion against liberalism. It also reflects a broader argument about who should determine the political future of a country: national electorates or increasingly powerful transnational institutions.

The same tension can be seen in the backlash against what critics call “Davos Man”—the internationally connected elite whose professional and social lives transcend national boundaries.

Mearsheimer makes an important admission here: scholars and professionals operating internationally can themselves become part of this globalized elite. The issue, however, is not internationalism itself. The problem arises when international elites begin to treat national political preferences as obstacles to be overcome rather than realities to be understood.

The West’s Strategic Blind Spot

The deeper tragedy of the post-Cold War era is therefore not that Western policymakers were foolish. It is that they became too confident. American power worked remarkably well during the unipolar moment. Military intervention removed governments. Economic sanctions imposed enormous costs. NATO expanded. Western institutions spread. Globalization deepened.

Success created the illusion that the same instruments would continue producing the same outcomes indefinitely. But international politics changed. China rose. Russia recovered. Nationalism remained powerful. Regional powers became more assertive.

And societies subjected to external intervention became increasingly resistant to political engineering. The West continued operating as if it were living in 1995 while the international system was gradually moving toward 2025, 2026 and beyond. That strategic lag is now becoming expensive.

The wars in Ukraine and the Middle East are not isolated failures. They are symptoms of a broader transition from a period of American primacy toward a much more contested international system.

The Iranian Test

The renewed confrontation with Iran may ultimately become one of the clearest tests of Mearsheimer's theory. Iran is not simply a government sitting on territory. It is a state with a powerful national identity, a long historical memory, sophisticated regional networks and a political system that has survived decades of external pressure.

Attempting to destroy Iran's strategic capabilities is one thing. Trying to determine what political order emerges afterward is something entirely different. That distinction is critical.

The United States can possess overwhelming military superiority and still face enormous difficulty determining what happens the morning after the bombing stops. Who governs? Who controls the security forces? Who controls the borders? Who prevents fragmentation? Who maintains the country's territorial integrity? Who prevents regional powers from exploiting the vacuum? And perhaps most importantly: what happens when Iranian nationalism becomes the organizing principle of resistance to American power? These questions cannot be answered with military superiority alone.

A Multipolar World Requires a Different Mindset

The most important implication of The Great Delusion is therefore not that liberalism is inherently wrong. It is that liberalism cannot substitute for strategy. A liberal state can defend liberal values while recognizing that other countries possess legitimate national interests, historical identities and security concerns.

A democratic state can promote democracy without assuming that every society can be transformed through external pressure. A powerful state can use force without believing that force automatically produces political control. And an international order can promote rules without pretending that great powers will ignore their core security interests for the sake of abstract principles. That is the difficult balance the West has struggled to achieve.

The emerging multipolar world will not permit the same degree of strategic freedom that Washington enjoyed after 1991. The United States will increasingly have to negotiate with powers it cannot dominate, compete with states it cannot isolate and coexist with governments whose political systems it fundamentally dislikes. That is not necessarily a decline of the West. It is a return to international politics.

The End of the Delusion?

Mearsheimer's greatest contribution may be his insistence that foreign policy must begin with reality rather than aspiration. The world does not become liberal simply because Washington wants it to.

Nationalism does not disappear because elites declare it obsolete. Great-power competition does not vanish because international institutions wish it away. And military superiority does not guarantee political victory.

The lesson of the last three decades is not that the United States is weak. It is that power has limits. The post-Cold War generation inherited an extraordinary concentration of American power and interpreted it as evidence that history had changed permanently. It had not. The unipolar moment was temporary. The return of great-power competition is permanent.

The strategic question facing the West is therefore no longer how to make the entire world resemble itself. It is how to preserve its interests, institutions and values in a world where other powers have the ability—and increasingly the willingness—to say no.

That requires something more difficult than ideological certainty. It requires restraint. It requires realism. And above all, it requires accepting that other nations are not simply objects of Western policy.

They are actors with their own histories, identities, ambitions and red lines. The greatest delusion was never believing in liberal values. It was believing that the rest of the world could be remade in their image. As the international system fragments into a more competitive and unpredictable order, Mearsheimer's warning has become increasingly difficult to ignore.

The question is no longer whether the age of liberal hegemony is ending. The question is whether the West can adapt to what comes after it—before another generation pays the price for refusing to do so.

Further Reading: U.S. Interventionism: When American Power Collides With Political Reality — Kurdish Policy Analysis. The article examines why American military and political power repeatedly struggles to produce the outcomes Washington expects, from Iraq to the wider Middle East.

About the Author: Dr. Pshtiwan Faraj is the founder of Kurdish Policy Analysis, focusing on Kurdistan, Iraq, Iran, Middle Eastern geopolitics, security, energy and great-power competition.


#Mearsheimer #TheGreatDelusion #Geopolitics #Realism #LiberalHegemony #Nationalism #Ukraine #Iran #Trump #GreatPowerCompetition

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