Midweek Signal 28 | 2026
Iran, Ukraine and NATO Reveal Why Strategic Leverage Is Becoming More Valuable Than Dominance
MIDWEEK SIGNALS
7/9/2026
One of the clearest signals emerging from this week’s developments is that governments increasingly appear less focused on achieving outright dominance and more concerned with building strategic leverage. Military superiority, economic strength and diplomatic influence remain indispensable components of national power, yet recent events suggest policymakers are increasingly seeking to shape the decisions of rivals rather than control outcomes outright. In an international environment characterised by prolonged competition, multiple centres of influence and rising geopolitical uncertainty, leverage is becoming one of the most valuable strategic assets a government can possess.
This represents an important evolution in how power is exercised. During much of modern history, states often sought decisive victories that fundamentally altered the balance of power. Military campaigns aimed to defeat adversaries, diplomacy sought comprehensive settlements, and economic policy frequently pursued maximum advantage over competitors. Today’s strategic environment is considerably more fragmented. Nuclear deterrence limits escalation between major powers, economic interdependence increases the costs of prolonged confrontation, and regional powers possess greater ability to influence events independently. Under these conditions, governments increasingly recognise that outright dominance is often unattainable or prohibitively expensive. Instead, they seek to improve their negotiating position by accumulating leverage across military, economic, technological and diplomatic domains simultaneously.
The evolving confrontation between the United States and Iran illustrates this transformation particularly clearly. Military exchanges have continued even as diplomatic channels remain active, while renewed tensions surrounding the Strait of Hormuz demonstrate that geography itself remains one of the world’s most powerful strategic assets. Neither Washington nor Tehran appears able to impose a decisive outcome without accepting significant political, military or economic risks. Consequently, both continue combining military pressure, diplomatic engagement and economic signalling in an effort to influence each other’s calculations. The objective is increasingly not unconditional victory, but strengthening one’s position before the next stage of negotiations begins. Power, therefore, becomes the ability to influence decisions rather than dictate them.
The Strait of Hormuz itself demonstrates why leverage has become such a powerful instrument. A single incident affecting one of the world’s most important maritime chokepoints can influence global energy markets within hours. Governments understand that safeguarding or threatening critical infrastructure often produces geopolitical consequences far beyond the immediate event. Geography, logistics and economic interdependence therefore become strategic assets capable of altering international behaviour without requiring direct military confrontation. Modern leverage increasingly derives from controlling the conditions under which other states make decisions.
Ukraine continues applying similar logic in its campaign against Russia. Repeated drone strikes targeting refineries and energy infrastructure are strategically significant not only because they damage industrial assets, but because they steadily increase the economic and logistical costs of sustaining the war. Rather than relying exclusively on territorial gains, Kyiv increasingly seeks to weaken Russia’s long-term capacity to finance, fuel and maintain military operations. Reports that Russia’s export restrictions immediately affected global diesel markets further illustrate how economic systems have become integral to modern geopolitical competition. Military operations increasingly generate consequences that extend well beyond the battlefield, influencing international energy markets, industrial production and political calculations simultaneously.
This reflects a broader transformation in contemporary conflict. Military success is no longer measured solely through captured territory or battlefield victories. Governments increasingly seek to alter the incentives facing their opponents by targeting supply chains, infrastructure, industrial production and economic resilience. Such measures rarely produce immediate or decisive outcomes, yet they gradually reshape the strategic environment by increasing the long-term costs of continued confrontation. The ability to influence an adversary’s future choices is becoming at least as important as achieving immediate tactical gains.
NATO’s recent summit illustrates how leverage also operates through alliances. President Trump’s evolving position on Ukraine, renewed discussions surrounding Greenland and continuing debates over defence spending demonstrate that modern alliances function through constant political negotiation rather than automatic consensus. Their strength increasingly lies not simply in their combined military capabilities but in their ability to coordinate diplomatic, economic and industrial responses among multiple governments. Collective leverage frequently allows alliance members to shape international developments more effectively than any individual state acting alone. Preserving that shared influence has therefore become an important strategic objective in itself.
Canada’s continued expansion of defence investment reinforces this conclusion. Increasingly, governments are not investing solely because immediate conflict appears imminent, but because maintaining credible capabilities strengthens their position across a wide range of future scenarios. Defence procurement, industrial capacity and technological innovation provide governments with strategic options long before crises emerge. Leverage is valuable precisely because it expands political flexibility. States possessing stronger military industries, more diversified supply chains and greater technological capabilities enjoy broader choices when confronted by geopolitical uncertainty.
This same logic increasingly extends beyond traditional security policy. Governments now compete through access to advanced technologies, critical minerals, artificial intelligence, semiconductor production and energy infrastructure alongside conventional military capabilities. These assets provide influence because they shape the opportunities and constraints facing other countries. Strategic competition, therefore, extends across multiple domains simultaneously, with governments seeking advantages that may never need to be exercised directly in order to remain effective. Possessing leverage often proves sufficient to influence behaviour without resorting to confrontation.
Taken together, this week’s developments suggest that governments are adapting to an international system where outright dominance is becoming more difficult to achieve, while strategic leverage is becoming increasingly valuable. Military power remains essential, yet it increasingly operates alongside economic influence, technological capability, diplomatic relationships and industrial resilience. Rather than expecting decisive victories, governments appear increasingly focused on preserving flexibility, shaping incentives and influencing the strategic calculations of rivals over extended periods.
The defining signal this week is therefore not simply that geopolitical tensions remain elevated or that competition between major powers continues to intensify. It is that governments are increasingly redefining power itself. During much of modern history, strength was often associated with the ability to impose outcomes. Today’s international environment rewards something more nuanced: the ability to shape choices, constrain alternatives and preserve room for negotiation even amid persistent uncertainty. In an era characterised by multiple centres of influence and prolonged strategic competition, leverage is becoming valuable not because it guarantees success, but because it expands the range of options available when certainty has become increasingly rare.
References:
United States, Iran & Middle East Security
• CNN — Live updates: US and Iran trade strikes for second day after Trump said ceasefire is ‘over’
https://www.cnn.com/2026/07/08/world/live-news/iran-war-nato-summit-ukraine-trump
• Axios — With Iran ceasefire “over,” Trump shifts to battle for Hormuz
https://www.axios.com/2026/07/09/trump-iran-strait-hormuz-battle
• Reuters — US diesel futures post biggest daily gains in four years after Russia bans exports
Ukraine, Russia & Strategic Competition
• The Hill — Trump hands Zelensky major wins, with Putin on the ropes
https://thehill.com/policy/international/5959830-trump-zelensky-thaw-nato-summit/
• The Washington Post — Deadly Russian strikes hit Ukraine’s capital ahead of key NATO meeting
• Kyiv Independent — Ukrainian drones hammer Russia’s Saratov Oil Refinery, Tatarstan petrochemical plant, Zelensky confirms
https://kyivindependent.com/ukrainian-drones-reportedly-strike-russias-saratov-oil-refinery/
NATO, Alliances & Geopolitics
• The Guardian — Sabre-rattling to ‘tremendous love’: erratic Trump dominates final hours of NATO summit
https://www.theguardian.com/world/2026/jul/08/erratic-trump-dominates-final-hours-nato-summit
• Euronews — NATO leaders to meet after Trump restates Greenland claim
Politics & Strategic Influence
• The New York Times — Farage’s Resignation Risks Becoming Farce as U.K. Parties Boycott Clacton By-Election
https://www.nytimes.com/2026/07/08/world/europe/uk-nigel-farage-resigns-clacton-election.html
• NPR — Le Pen says she’ll run for French presidency next year despite court-ordered monitor
https://www.npr.org/2026/07/08/g-s1-132467/le-pen-court-ordered-monitor
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