Allied shipping concerns are tremendously reduced due to no need to divert around the Mediterranean, while the naval threat allows them to seriously reinforce Singapore if needed. No North Africa allows all sorts of reserves to be moved around to other theaters.
There is probably no Iraq rebellion without Italy in the war, no Greece invasion saves the Germans from moving in there, but also saves the British a lot. Yugoslavia still probably happens and might be a parallel Italian war to grab the whole things, a la 'A Fitter Italian Military'.
So no Italy in the war is a major help to Britain and a deficit at the same time early on, because it keeps the Germans focused on Britain as the only place to fight in 1940-41. It saves the Germans a lot of trouble, resources (both military and economic), but it does the same for the British. 1940-41 largely goes the same, but beyond that thing start to diverge. Britain is focused on Northwest Europe and Norway, so will be putting pressure on there.
The US entry will pretty much mean they have no choice but to invade France in 1943 and try to put a lot of aerial pressure on Germany in 1942 in France/the Lowlands, but it let's Germany keep its limited assets concentrated. The lack of losses and diversion of resources in the Mediterranean and lack of ability of the Allies to even reach Romania saves in 1943 10-15% of its AAA assets along with a lot of fighters and other defenses (radar, smoke generators), which then end up in Germany and the West, which is a serious reinforcement. 1940-43 deprives the Allies of the ability to get any combat experience against the Germans, so they are walking into a French invasion without a lot of the assets they had accumulated IOTL, such as diverting German resources south, the Tunisian defeats, dispersing German resources over a number of theaters, having bases to hit Austria and the Balkans, etc.
1943 is going to be a force on force situation, but without the oil pipeline in place in Britain or the Mulberry harbors ready. Plus all the forces that were in the Mediterranean and Italy can appear in France to counter an invasion.
But the big deal is going to be in the East; without the Mediterranean diversion and Greece, the Axis will have a sizeable increase in forces to use in 1941-43 against the Soviets. Depending on what the Italians do with Yugoslavia, the Germans might not even have to deal with that. The lack of Italians in the East will hurt in 1942, but is offset by greater German forces not locked down in supporting Italy, so it pretty much a wash. This means significantly more damage to the Soviets in 1941-43 until the Allied attempts in France.
Uranus might not be pulled off ITTL, especially if the Germans have to fill in the gap left by having no Italian 8th army and the historical Panzer Armee Afrika available, plus all the occupation troops used in Greece/Yugoslavia IOTL. Leningrad might fall in 1941 with the Afrika Korps used in the East, plus the FJs and the aircraft saved from Greece.
So come 1943 the Eastern Front could be a different situation, with significant German assets available to repel and invasion attempt in France. It will be bloody regardless and might well fail. But the Allies will attempt it. I think they will pressure Italy, but if Italy isn't interested in the risk, they will demure in 1943, but eventually jump in to secure their interests in Austria and the Balkans when the situation is ripe (i.e. the Germans are weak enough).
Personally I think the war will go better for Germany until 1944 when things start falling apart sooner, while the situation for Japan is pretty much worse from the beginning. The Allies end up taking more losses against Germany overall, as they cannot bring their superior numbers to bear as effectively, while the Germans area able to avoid issues of OTL of trying to defend everywhere at once and dispersing their limited strength. The Soviets take more damage in 1941-43 and probably then aren't as effective in 1942-44 ITTL until the Wallies are able to really inflict significant damage through attrition. IMHO the Soviets end up further East at the end and the Wallies get further in Germany, but at a higher cost and the Italians end up collapsing Germany sooner when they enter the war and let Wallied forces into their territory, pretty much then on Austria's border, rather than stuck just entering into Northern Italy in 1945 like IOTL.
If the Wallied 1943 invasion of France doesn't work they will try again in 1944 and succeed, then invading Southern France, and pressuring Italy into joining the war by the end of the year.
