Khamenei’s killing is neocolonialism’s final gambit

In 1953, the US and the UK staged a coup in Iran that deposed Prime Minister Mohammad Mossadegh, the first democratically elected leader of a major Muslim country. The intervention, staged to regain control over Iranian oil, was a milestone in the transition from colonialism to neocolonialism.

The recent US-Israeli killing by bombing of Iran’s spiritual leader, Ayatollah Ali Khamenei, was an extraordinary spectacle of state-sanctioned assassination. One unintended consequence could be the unraveling of the petrodollar system, a key pillar of neocolonialism and American hegemony.

If the US and Israeli strategic objective was to decapitate Iran’s leadership and intimidate the nation, indications so far are that the effect has been catastrophically counterproductive. The assassination of a spiritual leader, however contested within Iran, has unified broad sections of the Muslim world in indignation.

The importance of the petrodollar system to the US goes a long way in explaining why US President Donald Trump risked a regional war to eliminate Iran’s spiritual leader. The abduction of Venezuelan President Nicolas Maduro fits into the same pattern. Like Iran, Venezuela has massive energy reserves and is building growing ties with China.

Follow the money

After the 1971 collapse of the Bretton Woods gold standard, the US secured an arrangement with Saudi Arabia in 1974 whereby oil would be priced exclusively in US dollars.

This created an artificial and perpetual demand for American currency: any nation needing oil must first acquire dollars, effectively forcing the world to subsidize American economic dominance.

This arrangement exemplifies what Ghana’s president, Kwame Nkrumah, first identified as neocolonialism: the condition in which states possess “all the outward trappings of international sovereignty” while being in reality “directed from outside.”

He famously detailed this concept in his 1965 book, “Neo-Colonialism: The Last Stage of Imperialism.”

Unlike classical colonialism, which involved direct territorial occupation and administrative control, neocolonialism operates through economic domination, debt structures and currency mechanisms that perpetuate extraction without the burdens of formal empire.

The petrodollar represents neocolonialism’s perfect instrument: invisible, self-reinforcing and virtually inescapable.

Iran has always been the weak link in this architecture. When Iran’s Mohammad Mossadegh dared to nationalize the Anglo-Iranian Oil Company (later British Petroleum), the CIA and MI6 orchestrated a coup. The UK’s leader at the time, Winston Churchill, worked for the Anglo-Iranian Oil Company before entering politics.

After deposing Mossadegh, the US installed the Shah’s brutal dictatorship, which ruled for 26 years until the 1979 Islamic Revolution ejected American influence. That religious revolution created the only major regional power that did not subordinate its oil policy to American interests.

Today, the six quasi-feudal Gulf states are crucial to the petrodollar system. All host American military bases and participate in the petrodollar bargain, recycling their oil wealth into US securities and weapons systems.

Gulf States’ holdings of American securities exceed US$1 trillion, with sovereign wealth funds managing another $4.9 trillion in assets deeply integrated with Western markets. Iran stands outside this arrangement, trading oil in euros, yuan and rupees while actively encouraging trading partners to abandon the dollar.

With US forces using the airspace of its client states in the Gulf to attack Iran, Tehran has retaliated by launching missiles precisely at those Gulf states hosting US bases—Bahrain, Kuwait, Qatar and the UAE—striking the symbols of their complicity in the neocolonial order.

The nuclear pretext

The official reason for killing Iran’s leader and the broader war has centered on Iran’s nuclear program. But this rationale collapses under scrutiny.

Iran has consistently maintained that its nuclear activities are peaceful, and multiple US intelligence assessments have confirmed that Iran suspended any organized weapons program in 2003.

Despite unprecedented inspection access, the UN’s International Atomic Energy Agency has never produced credible evidence of a diversion to weapons development.

The hypocrisy is staggering. The US, which maintains an arsenal of approximately 5,000 nuclear warheads, has never signed the Comprehensive Nuclear-Test-Ban Treaty, an agreement that aims to ban all nuclear explosions worldwide.

Israel, the region’s sole nuclear power, possesses an estimated 90 warheads while maintaining a policy of deliberate ambiguity and refusing to sign the Nuclear Non-Proliferation Treaty. India, which tested nuclear weapons in 1974 and 1998, has been rewarded with a civilian nuclear deal rather than sanctions.

What also threatens the petrodollar order is an Iranian breakthrough in peaceful nuclear technology. If Iran masters the complete nuclear fuel cycle, it achieves energy independence— and with it, the ability to allocate more of its oil for export in currencies other than the dollar.

Every megawatt of nuclear-generated electricity in Iran is a direct challenge to dollar hegemony, freeing petroleum for markets that increasingly trade in renminbi, rupees and rubles. The nuclear issue has never been about weapons; it has always been about sovereignty.

Moral bankruptcy

The global order’s moral bankruptcy has been exposed by the international response to Khamenei’s killing. While China and Russia have condemned the attack, European leaders have mostly offered only tepid statements urging “restraint”, though Spain has refused US access to its bases and the UK has limited US use to “defensive” operations.

That’s because Europe, as a vassal of the petrodollar system, is hesitant to question the framework that maintains its economies reliant on energy trade denominated in dollars.

Indian Prime Minister Narendra Modi has issued appeals for de-escalation but has failed to condemn the assassination of Khamenei, effectively aligning himself with the (neo)colonial forces that once subjugated the subcontinent.

Beyond the strategic miscalculations, Khamenei’s assassination breached a fundamental norm in international relations.

While states have long practiced targeted killings of militant leaders, the assassination of a foreign head of state represents an unprecedented escalation. It signals that no Iranian official, civilian or religious, can safely engage in international diplomacy.

The timing of the attack, which occurred just days after Trump’s envoys had negotiated with Iran’s foreign minister in Geneva, compounded this breach. Oman had on Friday reported what it called a “breakthrough”, with Iran agreeing not to stockpile any uranium.

By attacking while negotiations were ongoing, the US demonstrated that its commitment to diplomacy is contingent on the US dictating the terms. Trump’s subsequent statements have confirmed this interpretation. Speaking like a New York mobster, he told ABC News, “I got him before he got me.”

Bookending neocolonialism

Iran tragically bookends the rise and potential fall of neocolonialism. The 1953 coup that overthrew Mossadegh inaugurated the modern era of American-led economic domination in the Middle East, establishing the template for subsequent interventions in Guatemala, Chile and dozens of other countries. The assassination of Khamenei could potentially signal a significant shift.

The petrodollar system that seemed eternal a decade ago now faces existential challenges from multiple directions. China trades oil in yuan, Russia has abandoned the dollar for most energy transactions and the BRICS nations actively discuss alternatives to dollar hegemony.

Understanding the current trends, Saudi Arabia has begun to accept renminbi for oil sales to China. India and Iran have operationalized a rupee-rial payment mechanism. Every transaction that bypasses the US financial system contributes to building the infrastructure for a post-dollar world.

By overreaching so blatantly, the US has accelerated the very forces seeking to dismantle the neocolonial order. The assassination was meant to demonstrate American power; instead, it has revealed American desperation and the moral bankruptcy of its political elite.

The killing of a spiritual leader cannot preserve a system that has lost its moral legitimacy. The petrodollar rests on consent, however coerced. Once that consent evaporates—once nations realize they can trade without dollar intermediation—the entire edifice crumbles.

The question is not whether the neocolonial order will end, but what will replace it. The answer lies with the peoples of the Global South, who must ensure that the dismantling of dollar hegemony does not simply substitute one master for another.

Iran’s long struggle against domination—from Mossadegh’s nationalization to Khamenei’s martyrdom—offers a lesson: sovereignty is not given, it is asserted. The petrodollar’s death throes will be violent, but from its ruins may finally emerge the genuine independence that was promised in 1953 and stolen in a single night.

When future generations write the history of this moment, they will record that the old order died not with a whimper, but with a drone strike over Tehran. They will question: Where were the leaders of the Global South during the last great crime of neocolonialism? India, of all nations, should have an answer. Its silence is its judgment.