Shock from Iran war has Trump's vision for US energy dominance flailing

“The only way to do what the president said in his speech, which is to be completely independent and have this not matter to us at all, is to just dramatically reduce demand for oil,” said Kate Gordon, CEO of the sustainability advocacy group California Forward, who served as a senior advisor in the Department of Energy under President Joe Biden. “There’s no other policy mechanism that actually makes us independent of this system.” Credit: Inside Climate News Credit: Inside Climate News The United States can call itself energy independent because its exports (10.8 million barrels per day of crude oil and petroleum products) exceed its imports. But the imports—the oil that Trump says the country doesn’t “need”—are crucially important for meeting the particular requirements of US refineries—especially those on the Gulf Coast and in California. Credit: Inside Climate News Credit: Inside Climate News Credit: Inside Climate News Credit: Inside Climate News The closing of the Strait of Hormuz stranded tankers from Qatar and the United Arab Emirates, which together provide 20 percent of global LNG. Asia has been especially hard hit because it imports 80 percent to 90 percent of the supply from the Persian Gulf. The reopening of the strait will not restore all of the lost supply. In mid-March, Iranian missiles knocked out 17 percent of capacity at Qatar’s Ras Laffan refinery, and QatarEnergy’s CEO said repairs could take five years. The United States has made an aggressive push to be a bigger part of the global LNG market, with Trump seeking to secure major purchase agreements from trade partners like Japan, the EU, and South Korea. But the eight existing US LNG export terminals are already running at full capacity. Although Trump has vowed to bring more capacity online, construction, and permitting of the complex multibillion-dollar facilities take years. As a result, US exports of LNG, about 15 billion cubic feet of gas per day, are currently limited to only 11 percent to 13 percent of total US natural gas production. The situation leaves the United States with an abundance of its top fuel for electricity even while other countries are scrambling to stretch their supplies. But American consumers have been coping with sharply rising electricity prices for a host of reasons unrelated to the war—mostly due to the capital build-out by utility companies, in part to accommodate the data center explosion but also to build resilience against wildfire, storms, and other climate change impacts and to replace aging infrastructure. In their bi-monthly video series, energy analysts at the Center for Strategic and International Studies contemplated how the best example of US energy independence is almost wholly unnoticed by American consumers because of these other factors. “So while we’re staring at the precipice of a global energy crisis, or might already be in one, the United States is going to feel that in oil markets, but we are, for the time being, by the nature of the gas system and the bountiful supply here in the United States, insulated against the gas price shocks?” asked Joseph Majkut, director of the CSIS’ Energy Security and Climate Change program. “Well, nobody paying their utility bills right now is probably feeling like this is a good news story here in the United States,” said Kevin Book, head of research at ClearView Energy Partners, a CSIS senior advisor. “But they should talk to their friends across the oceans.” Stories coming out of China since the start of the Iran conflict show that it has the policy and corporate infrastructure to ride out oil and gas shortages better than other countries, in part by leveraging its undisputed position as world leader in clean energy technology. With more than half of new car sales in China now electric, analysts estimate EVs have displaced about 1.7 million barrels of oil per day, or about 10 percent of the nation’s petroleum consumption. Chinese battery makers have seen their stock prices climb, and China’s BYD, which overtook Tesla three years ago to become the world’s top-selling EV company, saw its exports and overseas vehicle sales soar 65 percent in March compared to March 2025, according to the company’s chief executive. China still is burning a great deal of coal for electricity, and that could increase due to the energy crisis—a seeming contradiction with China’s clean energy policies if looked at from a climate perspective. But Gross said when considered through an energy-security lens, it makes sense that China would lean on use of its most abundant fossil fuel, coal, while investing in alternatives to oil, since it doesn’t have enough reserves to meet domestic demand. “They’re doing better than they otherwise would be” amid the Iran crisis because of these seemingly contradictory energy policies of ramping up coal and renewables, Gross said. “This is the energy security crisis they’ve been thinking of.” But Gross is not betting that high prices at US gas pumps will be sufficient to spur a significant short-term increase in EV sales in the United States, especially since Trump and the Republican Congress last year repealed the tax incentives that would have made the initial purchase easier. “They’re still expensive and the subsidy has gone away, so people are going to have to really believe that oil prices are going to be high for a while for them to sort of see their value in it, which is unfortunate,” Gross said. “This could be a real opportunity to get more electrification into the vehicle fleet.” In a research note this week, Michael Cembalest, chairman of market and investment strategy for J.P. Morgan Asset & Wealth Management, was even more pessimistic that an energy shock like the Iran disruption could motivate the United States to reduce its fossil fuel dependence enough to enhance its energy security. “For a country without a national carbon tax or a gasoline tax and declining renewable subsidies, this seems like a fever dream,” he wrote. But David Victor, professor in the school of global policy at University of California, San Diego, who co-directs the school’s Deep Decarbonization Initiative, said he saw the possibility that the crisis could revive enthusiasm for investment in alternatives, which have been scaled back under Trump. “Unless the war really drags on for a long, long time, and we see sustained extremely high oil prices, I don’t think it’s going to change the fundamentals,” he said in a discussion with EconoFact, a publication of the Fletcher School at Tufts University. “But there’s no question that a lot of clean energy projects look a whole lot more attractive in a world where oil is dancing around $100 than when it’s dancing around $50.” Inside Climate News’ Peter Aldhous contributed to this report. This story originally appeared on Inside Climate News.