This essay uses Freudian–Lacanian psychoanalytic theory to interpret Hassan Blasim’s short story “The Nightmares of Carlos Fuentes”. Blasim’s story depicts the psychological struggles of an Iraqi emigrant relating to his embattled sense of belonging in a Dutch society due to the recurrent nightmares of his “traumatic” past. It challenges his assimilationist fantasies. I develop Lacan’s idea of ontological lack as a structural susceptibility that is exacerbated by actual experiences of trauma to underline how racialized refugees from the war-torn global South are doubly vulnerable to experiencing subjective dehiscence between their efforts to forget past war traumas and the challenges of assimilating into (white) host nations. This essay uses Blasim’s story to illustrate a serious psychological issue experienced by racialized minority subjects in white/European host countries.