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Germany could never have gained parity in the Atlantic the RN was simply too big and too powerful for the Kriegsmarine to have caught up during wartime.
I really don't think Churchill would have had a choice but defend India and the Middle East because without it Britain would have been completely stripped of its own resource supplies as well as the manpower reserves of India/Pacific region.
The only real question is would it have been enough to bring the USA into the war, on one hand Roosevelt had painted them into a corner with his "isoloationism" speeches so without an attack on the USA it would have been hard to justify a war and on the other hand the relationship with Japan was so bad by late 1941 that any Japanese actions could have been used as a pretext for war.
I am playing with this scenario as it is the only way I could see Japan entering the war, helping its Axis partners and still achieving its strategic goals of materials and territory which is something that an attack on Russia would not have provided.
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We are more often treacherous through weakness than through calculation. ~Francois De La Rochefoucauld |