President Trump’s national address Wednesday evening included a pointed message to European and Gulf State allies that the United States, as the world’s largest oil producer with substantial export capacity, expects other nations dependent on Strait of Hormuz oil flows to take the lead in protecting that passage rather than waiting for Washington to do it for them.
Brenda Shaffer, faculty member at the US Naval Postgraduate School’s Energy Academic Group and senior fellow at the Atlantic Council’s Global Energy Center, joined Dan Proft on Chicago’s Morning Answer to explain why American energy independence has not insulated consumers from the current price spike, and why she believes the roots of the crisis extend far deeper than the military campaign against Iran.
Proft opened with what he described as a practical question from a friend: if the United States is energy independent, exports oil, and does not rely on the Strait of Hormuz, why are Americans paying four dollars a gallon at the pump? Shaffer said the answer is that oil is priced on a global market, and a price set domestically below the world market rate would constitute a government subsidy, not a natural consequence of domestic production. American producers in Texas, Oklahoma, New Mexico, and Pennsylvania are actually benefiting substantially from the current elevated prices, she noted, while American consumers absorb the same global price increase felt everywhere else. The United States is both the world’s largest oil producer and a major exporter, which means its domestic price is anchored to global market conditions regardless of production levels.
She pushed back on the framing that treats the current spike as a consequence of the Iran campaign specifically, arguing that energy crises are always primarily the product of inadequate preparation rather than the specific disruption that triggers them. Markets built with genuine resilience in mind can weather geopolitical shocks, severe weather events, and infrastructure failures without dramatic price spikes. The fact that disruptions repeatedly produce dramatic spikes reflects structural failures in Western energy policy that predate any particular conflict. She said she agrees with Trump’s assessment that oil prices should fall relatively quickly once security in the strait is restored, because global supply and demand were reasonably balanced before the disruption, and the market should normalize as soon as the bottleneck is removed.
On Trump’s challenge to Gulf and European allies to take the lead in protecting the strait, Shaffer said it needs to be understood against a backdrop of years of American dereliction in upholding freedom of navigation that she traced back to 2017 and 2018. Iranian proxies and Iran directly attacked shipping in the Red Sea and struck targets in Saudi Arabia and the UAE repeatedly without meaningful American response. When Biden took office, his administration removed the Houthis from the terrorist designation list in his first week and effectively pressured Saudi Arabia to stand down from its war against the Houthis, leaving the Red Sea with persistent disruption and no enforcement. The Black Sea similarly saw freedom of navigation compromised as Russia’s war against Ukraine spilled into maritime shipping routes. When the United States consistently fails to defend freedom of navigation in one theater after another, she argued, adversaries draw conclusions about what they can get away with elsewhere, which is part of the context for Iran’s confidence in threatening the strait.
She noted that most European navies are in such poor condition that sending vessels to help reopen the strait is genuinely difficult, pointing to the Italian prime minister’s statement that Italy fears sending ships to the Gulf region would leave it unable to defend its own borders. She said this should be a wake-up call for European defense spending and naval readiness but expressed doubt that it will produce meaningful change. More promising, she said, is the prospect of participation from Japan and South Korea, nations whose energy security depends heavily on Gulf oil flows and who have both the capability and the direct interest to contribute to escort operations.
The deeper policy failure Shaffer identified runs through multiple dimensions of Western energy decision-making over the past decade. The Biden administration’s decision in the weeks before the 2024 presidential election to halt new contracts for American liquefied natural gas exports, a move aimed at appealing to progressive voters opposed to fossil fuels, pushed European and Asian buyers to concentrate their LNG contracts with Qatar. That concentration increased the vulnerability of both regions to exactly the kind of disruption now affecting Qatari natural gas output. She noted that Qatar has already lost roughly a fifth of its natural gas production capacity in the current conflict, a direct consequence of the geographic concentration that American policy inadvertently encouraged.
She also pointed to a broader failure of multilateral development finance. The G7 nations and the World Bank stopped public financing for fossil fuel development beginning in 2019 and 2021 respectively, a policy that has had limited direct impact on energy development in wealthy nations but has severely constrained energy access in Africa. The result has been a rollback in African electricity access, deepened poverty, and a missed opportunity to develop production capacity that would have reduced global dependence on Middle Eastern supply. She said Treasury Secretary Scott Bessent should push the World Bank to reverse those restrictions.
The California case provided what Shaffer said is perhaps the starkest illustration of the costs of ideologically driven energy policy. California has chosen not to develop its substantial domestic oil reserves, instead importing oil from abroad. Its largest foreign oil supplier is Iraq. As a result, California’s supply chain runs through the very strait that is currently disrupted, and the Pentagon has had to intervene to import oil directly into the state to prevent a supply disruption affecting its substantial military installations there. She said a state that once ranked among America’s top oil producers, and sits atop enormous reserves, now depends on Iraqi oil and faces the geopolitical consequences of that dependency during a military campaign in the Persian Gulf.