"Empty boast"? We didn't surrender, did we?
Only because Hitler's megalomania saved Churchill's butt by declaring war to Russia AND America before he was finished with Britain. A solo fight between Britain and fascist continental Europe, with Russia a friendly neutral to the latter, was hopeless, and if Hitler had done the wise thing, maintaining friendly neutrality to America and keeping the KM off US shipping, FDR would have had no hope in Hell of convincing the Congress and the American people to bail out Britain, no matter how much he howled his Germanophobia to the skies.
In any case, assuming Germany does force Britain to negotiate a peace, this is the signal for Stalin to start looking at them suspiciously. "Germany wouldn't fight on two fronts... it's all Churchill's plan!" was how Stalin justified inserting his head into his nether regions just before Barbarossa.
No question with this. I'm not arguing that a solo Nazi-Soviet match would necessarily result in the fulfillment of Hitler's Urals dreams. That result, although theoretically possible, is far from the most likely outcome. It would require deep changes to the way the Nazi managed their empire and their strategy, and it is indeed made much more difficult by the Russians not being caught by surprise. I'm just arguing that in such a fight, a Soviet conquest of Europe is ASB, and the only really plausible outcome is some kind of Brest-Litovsk peace of exhaustion, where Germany and its vassals wins but not triumphs, and Russia is cut down but not destroyed as a great power.
"Invading the Middle East" is still something that just happens without much explanation.
Hmm, how is Britain supposed to successfully defend Persia and Iraq from the Soviets, and Egypt and Syria-Palestine from the Italo-Germans, with its own resources, plus
peacetime American Land-Lease, for up to a couple years ?
And if the worst comes to the worst, I think we, as in Our Island, could be sustained by the Americans, if only as an airstrip.
If America is in the war, sure. What guarantees that ITTL Japan is going to go berserk, and Hitler and Stalin are going to declare war to America for no real advantage, before Britain collapses ?
Another long-standing strategic aim was to not be invaded by a military power dominating Europe. That the Russians made negotiations which could land them with some juicy morsels does not mean they actually intended to let Germany become undisputed master of Europe with a nod and a wink.
Nonetheless, it is a proven historical fact that German-Soviet diplomatic talks about Russia joining the Axis, including definition of anti-British strategic plans, were quite advanced in late 1940, and only failed because of divergencies about Bulgaria and Turkey, not because the fundamental streategic issues you talk about diverged. With slight tweaks to the leaders' personalities, a strategic equilibrium between a German-Italian bloc controlling continental Europe and the Mediterranean, and a Russia controlling the Middle East and Central Asia can be stable. Of course, you have Hitler's Lebenstraum plans getting in the way, and you may have Stalin's Suvorov plans too, which is where you reasoning would go. But this does not mean that slightly different leaders may not defer their own match until they have dispatched their common British enemy, as they seriously talked to do in 1940.
The Russians held Moscow, Leningrad, and Donbas without any meaningful help, and that was after a military disaster of truly flabberghasting proportions. Without American goodies, there would have been no "Stalin's Ten Blows", but the fact is the Russians didn't go in December 1941, and a German invasions of Russia in 1942 might well have much less initial success. The Germans achieved a truly astonishing level of total surprise, and concealing their aircraft, moving their supply depos, acknowledging the existence of German recon planes, and actually having a strategy in the first days of the campaign could all have helped the Soviets a lot.
No arguing with this. I'm not saying that this PoD makes a total German victory (defined as the Volga border or better) certain. I'm just saying that it makes a clear Soviet victory (defined as anything better than its 1939 borders) impossible, and a partial German victory (a Brest-Litovsk peace) the most likely outcome.