Just weeks after President Donald Trump signed a ceasefire memorandum that lifted financial sanctions on Iran’s foreign currency reserves, freed up Iranian oil exports, and committed the United States and its partners to a reconstruction framework worth hundreds of billions of dollars, Iran has violated the deal. U.S. Central Command struck more than 80 Iranian targets on Tuesday in response, and Trump has declared the deal “over.” Sanctions are reimposed, and a “risk premium” is creeping back into benchmark oil prices.
The speed of the collapse holds a lesson for policymakers, but more essential for Washington to understand is the flawed energy policy assumption that led us here.
The assumption is that surging oil production as a central pillar of energy dominance solves our fundamental energy security dilemma. The shale revolution transformed the country from a major importer into the world’s largest oil and gas producer. Washington has grown comfortable assuming that the devastating oil shocks of the 1970s could not be repeated when America is a net oil exporter.
Energy exports can strengthen influence, but when it comes to oil, they are never sufficient to provide geopolitical leverage in an actual crisis. The past several months — which featured the initial closure of the Strait of Hormuz, the ceasefire deal that included concessions on many Iranian demands, and the unfolding collapse of that deal — in fact reveal that while America is undeniably an energy superpower, it can never truly be energy-independent. Right now, we should question whether the U.S. is even energy-secure.
The president’s public statements articulate the challenge. A few weeks ago, just prior to the deal, Trump warned that the U.S. was at risk of “running out of [oil] reserves at about four weeks,” and that “there’ll be a time when you wouldn’t be able to get it,” with the end result being “bedlam.”
Trump’s warning is rational and legitimate, and the underlying economics all too real. The U.S. produces more oil than any nation in history, and the volumes produced, the quality of our reserves, and the relentless innovation of our oil industry are strategic assets. But producing large volumes of oil is not the same as being insulated from global energy markets. Oil is a globally traded commodity. A disruption to supplies anywhere affects prices everywhere. When the strait closed, prices rose at American gas stations not because the U.S. lacked barrels in the ground, but because the world couldn’t move enough oil to meet demand — and commercial inventories were draining at an unsustainable pace.
Iran understands this. It did not need to deliver a catastrophic shock to reshape American diplomacy — the mere prospect of $5 gasoline heading into summer driving season and midterm elections in November was sufficient. That is what adversarial leverage looks like in an oil-dependent economy: not invasion, not direct military confrontation, but the credible threat of supply disruption and the economic and political costs that follow.
The deal that resulted — sanctions relief, oil waivers, a $300 billion reconstruction commitment, and minimal nuclear transparency in return — drew criticism from both sides of the aisle. But we’re still negotiating with an irrational actor that continues to control the world’s most consequential maritime chokepoint. While America and our allies are desperate for stability and supply certainty, Iran retains the capability to remove millions of barrels from global markets whenever it calculates that the costs of disruption are lower than the benefits. This is the national security threat presented by oil dependence in its purest form.
While much of the discourse has focused on changing Iran’s leverage over the strait itself, policymakers must begin addressing our relationship to the commodity, rather than only emphasizing the chokepoint. True energy security is not measured by barrels produced — it is measured by an economy’s ability to withstand disruption without experiencing the inflation, shortages, and financial instability that force diplomatic concessions to adversaries. By that standard, the past several months have exposed a gap between American energy rhetoric and American energy reality.
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The lesson is not to avoid diplomacy. It is to reduce the leverage that compels us toward disadvantageous diplomacy in the first place. That requires reducing the strategic importance of oil itself — through greater fuel efficiency, diversity of energy sources, investment in disruptive innovations, optionality in oil-heavy sectors such as transportation, and resilient supply chains that reduce our exposure to the whims of hostile regimes.
The Strait of Hormuz is closed again, and continued volatility should be anticipated over the summer and beyond. The situation is fluid, but the underlying dynamic is not new — and it will not resolve itself simply because we strike more targets or reimpose more sanctions. America’s energy vulnerability will endure until both parties accept the need for a long-term policy strategy to address it, and until then, we will remain exposed to the whims of a hostile Iranian regime that shares neither our interests nor our values.
Avery Ash is the CEO of Securing America’s Future Energy, a nonpartisan energy security and national security organization based in Washington.