I'm going to add a couple random thoughts from background reading...
First, this excerpt from Osprey Publishing's 2013 "Operation Barbarossa":
What this shows decisively is that, pre-Barbarossa, OKH considered a Kessel along the lines I envision in AGS's sector. It shows that OKH judged that double envelopment as having a good chance of success, given the forces at its disposal in the wargame (two armies in Romania plus a panzer corps).
This version of my ATL adds 10 mobile divisions to AGS plus it would shift some OTL infantry divisions from the Bug front to the Prut. Does anyone have further details on the content of the Operation Otto wargames?
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Another post in this sub reminded me that OKH committed several divisions from its reserve during July 1941, none of which are typically counted in the Barbarossa OoB.
viewtopic.php?f=11&t=227126 The poster does not share details on the composition of OKH's reserve on June 22, 1941, but use of these divisions would obviate some of the issues discussed upthread regarding which forces to transfer from the West in my ATL.
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In another thread, we've been discussing the likelihood and impact of a Japanese attack on SU during Barbarossa.
viewtopic.php?f=11&t=235286
While I'm far from convinced that such intervention would have been decisive on its own, or that the Japanese were close to undertaking it on their own, I also observed the following:
If Hitler accurately judges SU strength and American war-appetite, he'd not have pushed Japan towards the U.S. Instead, he'd have sought to channel Japan into his anti-SU war.
What levers were at his control? Here's my best version of the case:
Japan's war effort was - apart from China - largely parasitic on Germany's: they wouldn't have considered fighting UK/France/USA unless they expected Germany to do much of the work.
The Tripartite Pact guaranteed Axis support if the USA attacked Japan.
In IGHQ cabinet discussions of moves against Southeast Asia, there are multiple mentions of the "deterrent effect" of Germany/Axis on America, should it object to Japanese moves southwards. [anybody have cites at hand? I'm going off memory; I returned the relevant volume to the library].
Hitler's ultimate lever, therefore, is rescission of the Tripartite Pact if Japan doesn't attack the USSR. This would leave Japan to face the U.S. alone if it moves against SE Asia. Hitler's rationale could be that, while Article 5 of the Pact specifically disavows ill intent towards the SU, Stalin had since nullified those considerations by "provoking" Germany to attack it. Given Stalin's treachery, Japan's honor depended on joining her ally. Absent Japanese help with the SU, Germany would see no reason to stick its neck out and fight America.
As a matter of history, I take it there's some debate about whether Roosevelt could have got a declaration against Germany following PH. Hopkins et. al. were at least relieved not to face that political fight after Hitler's declaration. As a matter of contemporary understanding of other countries, Japan wasn't beholden to theories about Roosevelt and the Jewish Cabal; it had good reason to believe the U.S. would stay out of the European war if given the choice.
Besides the Tripartite stick, Hitler had some small carrots as well: Japan was seeking German technical assistance on weapons and on industry, especially coal gasification. OTL Germany didn't send this assistance until late in the war; Hitler could have offered Japan blueprints of anything they wanted plus boatloads (Uboatloads) of German technicians. Germany and Japan also had disagreements - quixotic as they seem now - over the boundaries of their spheres of influence in the Middle East, India, and Central Asia. Germany could have offered concessions in those regions conditioned on Japan attacking the SU.
...in addition I'll add that greater Barbarossa success than OTL would have increased Japanese willingness to attack SU. Japanese perception that Ostheer was bogged down around Smolensk during the critical August-September period was mentioned in IGHQ/cabinet discussions of the Southern Strategy.
Because the heart of this ATL is Hitler better understanding the threat posed by SU, a change from OTL as outlined above would have been the wise course for Hitler.
In this scenario, the flipside of Japan not attacking the SU would be Hitler not declaring war on the USA - at least not as early as OTL. This is obviously the wise strategic move; IMO Hitler's OTL declaration was mainly the deranged flailing of a cornered animal. That's not true of a Hitler for whom Barbarossa has gone as planned - severely damaging the SU for a later coup de grace - rather than a Hitler whose vision has been derailed by Barbarossa's failure.
I don't believe it's necessary that Japan participate for Germany to beat the SU in this ATL. It does make German victory easier, however: Japan will tie down and/or capture dearly-needed RKKA formations during the late fall and winter battles. Japan's entry will further depress Soviet morale. Most importantly, a Japanese delay of war against USA means a delay of American forces in ETO. Most likely Torch can't occur before Spring 1943, for example, unless the British can pull it off by themselves. That seems doubtful, especially considering that U.S. involvement in the war - and German reverses in the East - was one of the factors that made Churchill confident that French North Africa would come onside during Torch. With Germany undefeated in the East, merely resting over the winter, and with Britain still fighting alone in the West, probably Churchill doesn't launch Torch on his own. And with ATL SU in collapse during latter 1942, the entire position in the Middle East is looking shaky, meaning that resources have to be diverted to Persia, Central Asia, and even possibly Turkey.
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Regarding Turkey:
Hitler's OTL strategy in the Balkans overall doesn't make sense given firm resolve to attack the SU; his Turkish position especially.
Re the Balkans, Hitler knew by December 1940 at the latest that he'd have to intervene but scheduled the operation too close to Barbarossa's intended jump-off. IMJ this reflects Hitler's equivocation and lack of clarity during this period. An earlier Operation Marita would have faced more weather difficulties but there's no way Greece/Yugoslavia stop the Heer in any weather. So why not do it earlier? IMJ a Hitler who viewed Barbarossa appropriately would have accepted sub-optimal Marita conditions to maximize Barbarossa's first-year impact. Only a Hitler who thinks Barbarossa is a cakewalk sacrifices a month of decent Russian weather to optimize Marita. So as a backdrop to a broader Russia/Turkey strategy, Hitler solves the Greece/Yugoslavia issue by March at the latest (Heer also gains valuable cold-weather experience as a result).
So as of March 1941 Hitler has already demonstrated Bulgaria's willingness to allow troop movements and has forces poised on Greek islands just off the coast of Turkey.
Against this backdrop, Hitler accedes to one of Russia's paramount geopolitical goals: access to the Turkish Straits. Plus he accedes to Soviet claims in Northeast Turkey such as the return of Kars province. OTL this was a major sticking point between Hitler and Stalin. From "The Turkish Straits and NATO":
So Stalin was thinking along the lines of a joint German-Italian-Soviet diplomatic/military action against Turkey but Hitler refused to go along. What a missed opportunity! The implications of such action could have been transformative in many ways. One paramount consideration would have been whether Stalin's course would have pushed Turkey into defensive alliance with the Allies - a real possibility. If that happens, however, and Hitler/Stalin seek a military solution, then the SU will be at war with the UK! That completely changes the nature of the war and entirely to Germany's favor. Even if Germany launches Barbarossa during UK-SU hostilities, there is very little chance of LL becoming a factor after UK and SU have killed a few thousand of the others' soldiers in, e.g., Persia. Or after Soviet submarines have torpedoed British merchant ships.
For now, let's aside the course in which a Turkey-UK alliance draws the SU into war against UK. It's just too easy to see Axis success after that happens, even if Hitler launches Barbarossa shortly after the Soviet/British shooting starts.
Suppose, instead, that Turkey accedes to Soviet/German demands, at least in part, as an alternative to war against both Germany and SU (and Italy). A settlement might be that Turkey cedes Kars province and allows a Soviet naval base on the Dardanelles. Hitler, however, agrees to a Romania-like guarantee of post-settlement Turkish territory and refuses Stalin the right to base large land forces around the Straits. Inonu's government likely falls in that case and is replaced by a pro-German, less pacifistic government. The fallout is likely Turkish cooperation in an SU attack at a later point in the war, even if not at Barbarossa's outset. The Russian naval and light land forces in the Dardanelles could be expelled by Turkey shortly after Barbarossa - under implicit threat of war.
Or suppose that Hitler simply tells Stalin he won't oppose any moves against Turkey but doesn't want to get involved because he doesn't want to push the Turks into UK arms and thereby set up RAF to bomb Ploesti. The Russians invade; if Britain goes to war against SU then we're back at a nightmare scenario for the Allies.
Whatever the details of Stalin getting most of what he wanted from Turkey with Hitler's help/acquiescence, Hitler could have extracted a pound of flesh from Stalin in exchange. Maybe 2mil tons of oil? Whatever the case it's icing on the cake to bringing Turkey on side and/or tying RKKA down and/or alienating the Brits and Russians from each other.