Fundamental Changes post Iran in Trading Blocs around the world

Stu Turley here from the Energy News Beat Podcast. For years on this show, we’ve been hammering home a core truth: energy policy is destiny. Affordable, reliable, abundant energy drives manufacturing, jobs, investment, and GDP growth. Ideological Net Zero pursuits that ignore reality — spiking costs, killing baseload power, and forcing deindustrialization — deliver the opposite.

Right now, we’re witnessing exactly that divergence play out in real time. Fundamental changes are reshaping global trading blocs in the wake of developments with Iran and the broader geopolitical realignment. A viral post by @aj_inapi (Allan) on X perfectly captures the bigger picture Trump is pursuing: moving America from the old post-WWII “globalist” model — where we paid the bills, defended everyone, ran trade deficits, and subsidized allies — to a transactional, America First coalition built around energy, trade, security, manufacturing, and strategic deals.

This isn’t minor tinkering. It’s the construction of new overlapping economic and security networks. And energy policy sits at the absolute center.

The Post-Iran Shift and Expanded Abraham Accords Framework

Recent actions and negotiations around Iran have removed a major destabilizing force in the Middle East. This opens the door for deeper normalization and deal-making. President Trump has explicitly linked any Iran settlement to expanding the Abraham Accords — urging more countries (Saudi Arabia, UAE, Qatar, Egypt, Jordan, and others) to normalize relations with Israel as part of broader stability and economic frameworks.

The original Abraham Accords already proved the model works: peace through prosperity, trade instead of proxy wars, and economic incentives stabilizing regions. UAE-Israel ties exploded in trade, tourism, tech, and energy cooperation. Expanding this post-Iran creates new trade corridors, shipping stability, investment flows, and energy coordination across a massive network that could encompass the US plus key partners in the Middle East, parts of Latin America, India, and strategic Indo-Pacific nations.

Combined economic power? Potentially over half the global economy in a pragmatic, growth-focused coalition. This is the new architecture: transactional deals where America sits at the center, leveraging energy dominance rather than endlessly subsidizing a fading unipolar system.

Energy Policy: The Line Dividing the Blocs

As I’ve said repeatedly on Energy News Beat, the world is splitting into two camps:

Growth-oriented blocs that prioritize affordable, reliable energy from all sources (fossils, nuclear, pragmatic renewables) to power manufacturing and prosperity.
Ideological Net Zero blocs that pursue rapid decarbonization at any cost, leading to high energy prices, industrial flight, and economic drag.

Growth-oriented examples thriving or positioned to lead:

United States (Trump era): Energy dominance agenda — expanded production, LNG exports, all-of-the-above approach. Lower costs attract the reshoring of factories. Stronger relative GDP performance as a net energy exporter.
Gulf states (UAE, Saudi Arabia, Qatar): Pragmatic energy giants. They leverage oil and gas wealth while diversifying, but never sacrifice growth or affordability. Normalization via expanded Abraham Accords frameworks brings investment, stability, and new partnerships. They choose reality over ideology.
India: Growth first. Heavy use of coal for reliable baseload power alongside renewables buildout. Prioritizing development for 1.4+ billion people delivers stronger momentum than pure climate targets.
China (pragmatic elements): Uses massive coal capacity to underpin manufacturing dominance while scaling renewables. Growth and competitiveness come before rigid timelines.

Russia will be a critical trading partner post-Ukraine war. They are critical in the deployment of low-cost energy.

Many countries in South America will be aligning with these new trading blocs.

Net Zero / deindustrialization path struggling:

European Union (especially Germany): Aggressive climate policies combined with loss of cheap Russian pipeline gas created structurally high energy costs. Industrial electricity prices in the EU averaged around €0.29/kWh in recent periods — far above the US (~€0.18) and dramatically higher than China.

Real-world consequences:

Germany lost ~248,000 jobs in key industrial sectors (autos, machinery, chemicals, etc.) in recent years.
The automotive sector alone shed over 110,000 jobs.
BASF (global chemical giant) downsized German operations and shifted production/investment toward the US and China due to uncompetitive energy costs.
Volkswagen announced factory closures and major job cuts in Germany.
Broader chemical and energy-intensive industries saw plant shutdowns, reduced capacity utilization, and relocation considerations.

EU GDP growth forecasts remain anemic (~1.1% for 2026 in recent projections), lagging global ex-EU performance. High costs + heavy regulation = factories and capital voting with their feet — many heading to the US.

Countries and blocs choosing reasonable energy policies (affordable + reliable) retain and attract industry. Those chasing rapid Net Zero without regard for cost or reliability watch manufacturing hollow out and GDP suffer.

Emerging Trading Blocs: Growth vs. Ideology

We’re seeing the formation of distinct blocs:

Pragmatic growth bloc (US-centered transactional network): Built around energy abundance, manufacturing strength, and deals. Includes expanded Abraham Accords partners, India, and like-minded nations. Focus: energy security, critical minerals, supply chain resilience, and prosperity through trade. Post-Iran stabilization accelerates this by calming energy markets and enabling investment.
Ideological/regulatory bloc (EU-led elements): Heavy emphasis on green regulations, carbon border adjustments, and rapid decarbonization targets. Result: competitiveness erosion, deindustrialization, and slower growth. Some may eventually adapt as pain mounts, but the lag is real and measurable.

Other groupings (e.g., certain BRICS dynamics) contain pragmatic players who prioritize growth over purity tests. The winners will be those who get energy right.

The Data Doesn’t Lie: Energy Policy Correlates with Outcomes

Affordable energy = competitive manufacturing = jobs and GDP resilience.
High-cost ideological policies = plant closures, job losses, capital flight, and subdued growth.

The US benefits as an energy powerhouse. Europe pays the price for policy choices. Gulf pragmatists and growth-focused Asian nations position themselves for the next era of trade and investment. Post-Iran developments remove friction and supercharge the pragmatic pathways.

Bottom Line from Energy News Beat

The fundamental changes post-Iran are accelerating a global realignment into trading blocs defined by energy realism versus ideology. Those following growth and reasonable energy policies — abundant, affordable, reliable power from all sources — will pull ahead in investment, manufacturing, and prosperity. Those doubling down on Net Zero-driven deindustrialization will continue falling behind.

This is exactly what we’ve been tracking on the Energy News Beat Podcast for years. Energy isn’t just another sector — it’s the foundation. The countries and blocs that understand this will build the future. The ones that don’t will inherit decline.

The shift is happening now. Pay attention. The data and the deals tell the story.

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