Global energy shifts because of the war in Iran
For a country that relies so heavily on oil, America has acted rashly with its war on Iran. On February 28th, following several weeks of threats from President Donald Trump, the United States and Israel launched an attack on Iran that escalated into a regional war. Now, at a national average of $4 per gallon, oil is among the most significant repercussions from Trump’s hasty war, its price rising over 30% since the start of the war. Regardless of whether America’s two-week ceasefire deal, signed on April 7th, will ultimately result in an overall peace settlement, the global energy landscape has already been irrevocably altered.
Iran has always played a key role in the global energy sphere. The country holds the fourth-largest oil reserves and second-largest natural gas reserves in the world. In addition, Iran’s significant power over the Strait of Hormuz, a critical maritime passage for over 20% of the world’s liquified natural gas (LNG), makes it all the more important. The Strait’s sudden closure on March 2nd naturally led to a global energy shock.
The U.S. has long boasted its domestic gas reserves and title as the world’s leading oil producer, but America’s supposed “energy independence” has not made it exempt from the war’s consequences. This is primarily due to America’s lack of control over oil pricing. The oil market is one large, interconnected system, and the U.S. exports oil to foreign markets where it’s priced globally. A supply threat in any given area affects oil prices across the board. America’s own oil reserves do not make it exempt from price hikes. Even worse, prices are quick to rise but slow to fall; economists believe the average American household will feel the financial sting for months to come.
The war on Iran goes beyond a simple uptick in gas prices. China, India, Japan, and South Korea account for 75% of oil and 59% of LNG that passes through the Strait of Hormuz. As a whole, Asia imports around 80% of its oil from the Strait. Unlike America, which has largely seen the war’s consequences only in higher gas prices, many Asian countries have suffered physical oil shortages — a far more catastrophic impact. While the Atlantic (the U.S. and Europe) has the safety net of American shales and local reserves, the Pacific (China, Japan, and India) must scramble for what little supply is left. Thus, the divide deepens between countries that have energy security and those that do not.
Certainly, other countries cannot wait around idly for the war to end. Over the past year, Chinese and Indian imports of Russian crude oil have fallen— a result of American trade deals and sanctions on Russian oil. The conflict in Iran almost immediately reversed this trend; desperate to patch the shortages from the Middle East, India and China allowed Russian crude to pour into their borders— an alliance formed out of the dire need for oil. The renewed energy dependence on Russia enables it to reclaim some of its power, furthering the divide between the East and the West.
The closure of the strait has also been detrimental to infrastructure, further solidifying distrust in Middle Eastern oil. On March 18, 2026, Iran attacked Qatar’s Ras Laffan LNG complex, effectively wiping out Qatar’s production by 17%. Experts estimate the country’s capacity will not recover for up to five years. The war’s destruction forces nations such as Qatar, caught within the crossfire, to build entirely new and permanent supply chains elsewhere. Once a country establishes a new energy pipeline to replace Middle Eastern oil, there is no reason for it to revert.
For many decades, the globalization of energy promised a consistent and secure flow of oil. The U.S.’s reckless war on Iran has exceeded the confines of a regional conflict, sowing distrust and altering the energy market across the world.
