When President Donald Trump announced Wednesday that he’s winding down the U.S. war on Iran and washing his hands of the embattled Strait of Hormuz, he invoked what he likes to call America’s “energy dominance”: The United States has become the biggest oil producer in the world, and no longer needs to secure the Persian Gulf by force.
“The United States imports almost no oil through the Hormuz Strait and won’t be taking any in the future,” he declared. “We don’t need it.”
That's news to the oil and gas industry. Trump is right: The flow of oil from the Persian Gulf to the U.S. is far less than it used to be. But no matter what he says, the industry is keenly aware of how important that oil still is. That’s why CEOs have been pleading with Trump for weeks to end Iran’s stranglehold on the Strait, which remains vital to the global market in which they operate.
And it's another reason why it's time to add Big Oil and national security to the list of longstanding political and economic dynamics that Trump has successfully thrown into chaos.
The dizzying effects of the Iran war actually seem to be ending a long period during which growing oil and gas production at home meant U.S. political leaders felt they could worry less about the energy-related risks of U.S. military interventions — and energy executives didn't have to fret about U.S. foreign policy as a major risk to their business.
Instead, Trump's war in Iran — not to mention his nominal takeover of Venezuela — has brought energy and foreign policy crashing back together, in unpredictable ways. And energy executives are indeed fretting.
For the better part of the last two decades, leaders in both parties have said that the fracking-fueled shale boom, which unleashed a gusher of American oil and gas onto the world market, would end America's reliance on foreign crude — and the tortured military entanglement with the Persian Gulf that has dominated U.S. foreign policy and the Middle East since the 1970s.
The glut in global supply that resulted, in part, from that boom, left the United States less exposed than Asia and Europe to price spikes and led the Trump administration to approach the U.S.-Israeli attacks on Iran last month as relatively low-risk, from an economic perspective.
But the U.S. and Israeli attacks on Iran in March, and the retaliation that followed, made clear that trouble in the Persian Gulf still means trouble for energy flows globally and for Big Oil (and Big Gas), whose investment calculations are being scrambled. It rapidly set off a global energy crisis — and, thanks to the mechanics of the U.S. refining industry, Americans were less insulated from a price spike in the United States than the average consumer might have expected.
While high prices provide a financial cushion for oil and gas majors, the war has introduced all manner of uncertainty into their investment decisions, which dominated conversations at the CERAWeek industry conference in Houston last week, as my colleagues James Bikales and Ben Lefebvre reported. The war has suddenly reintroduced concepts like naval tanker escorts, first used during the 1987-88 Iran-Iraq war, back into public discourse. Energy executives have hustled to kill proposals — like reimposing the crude oil export ban that former President Barack Obama and congressional Republicans lifted in 2015 — and been surprisingly explicit about the military outcomes they want to see, some sounding like Republicans from a different era.
“If you talk to [American Petroleum Institute] member CEOs, they also want to make sure that we're finishing the job in Iran. We can't leave Iran in a position where they can control the strait with any given drone that they shoot into the strait on any given day,” API president Mike Sommers, who once served as chief of staff to former Speaker of the House John Boehner,told POLITICO at CERAWeek.
It's hard to name an industry more closely associated with U.S. foreign policy around the world — minus defense, of course — than the oil and gas sector. While Franklin Roosevelt first cut a deal with Saudi kings to provide security in return for oil, Jimmy Carter in 1980, as part of his so-called Carter Doctrine, was the first president to declare that the United States would put American soldiers in harm's way to deny control of the Persian Gulf to a foreign power. In the subsequent decades, the U.S. military was deployed to safeguard the Strait of Hormuz and liberate oil-rich Kuwait from Saddam Hussein's invading forces. George W. Bush's invasion of Iraq in 2003 was about many things — but the need to ensure U.S. dominance in the energy-rich region was certainly one of them.
Even at the height of the Biden administration's efforts to revolutionize wind and solar investments (the wind ones now largely halted or reversed by the Trump administration), oil wasn't going anywhere. Officials in both parties argued that U.S. production would insulate it from energy shocks and costly military commitments. The U.S. has used its gas production heft to help Europe survive the energy effects of Russia’s invasion of Ukraine and four years of war.
But the past two decades saw a clear shift, says Meghan O'Sullivan, who was deputy National Security Advisor for Iraq and Afghanistan for two years under George W. Bush and now directs the Belfer Center for Science and International Affairs at Harvard's Kennedy School.
“Energy had receded in importance — not because it stopped mattering, but because abundance changed the calculus,” she told me last week. “With the United States enjoying a production boom and global markets broadly delivering supply, policymakers didn’t have to think about energy as a binding constraint on foreign policy, nor as a central objective of it.”
As Trump's own National Security Strategy put it in late 2025: “As this administration rescinds or eases restrictive energy policies and American energy production ramps up, America’s historic reason for focusing on the Middle East will recede.”
Now, O’Sullivan argues, the Iran dynamic, the Trump administration's nominal takeover of Venezuela and the U.S. fuel blockade of Cuba show that energy interests are once again being used as a tool and a target.
The Trump administration has done almost everything it can to roll back Biden and Obama-era climate and environment rules domestically, but its moves when it comes to oil and gas overseas have been less predictable — leaving oil and gas majors to simply try to keep up.
Take the Trump administration's capture of Venezuelan leader Nicolás Maduro in January: After the president called on U.S. companies to invest in the oil-rich but beleaguered country, oil and gas executives were underwhelmed — with ExxonMobil CEO Darren Woods calling the country “uninvestible" for the moment.
That may change, because with the domestic shale boom ebbing, oil and gas majors are looking abroad again — back to the Middle East, to once-chaotic, now-stable production fields in Iraq and Libya. But a “higher geopolitical risk premium in the region is not helpful for them,” Jason Bordoff, director of the Center on Global Energy Policy at Columbia, and senior director for energy and climate change on Barack Obama's National Security Council, told me.
In the shorter term, it’s still not yet clear whether Trump will make good on his threat to abandon the Strait of Hormuz — or whether he’ll direct the U.S. military to secure it, one way or another.
What is clear? In a world where oil and gas are still king, the United States isn't as “energy dominant” as it might seem. No matter who’s in power.
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