Oil price shock: Iran war exposes risks in US fossil fuel energy strategy

Surging oil and petrol prices linked to the war in Iran are putting renewed focus on President Donald Trump’s energy approach. Analysts say a stronger shift towards oil and gas has left the United States more exposed. That exposure grows as supply routes face disruption and alternative power options remain limited.

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Crude prices have climbed above USD 100 a barrel, while petrol has moved towards USD 4 a gallon. Experts say limits on wind and solar projects have reduced backup options. The Strait of Hormuz, vital for global oil flows, remains effectively blocked as Iran targets traffic through it.

Trump fossil fuels policy and rising US energy prices

Peter Gleick, a climate scientist and co-founder of the Pacific Institute, said consumers face the sharpest near-term impact. Gleick said the biggest short-term losers will be US buyers of oil and gas. Tyson Slocum of Public Citizen argued that reliance on fossil fuels carries its own supply dangers.

Trump campaigned on halving energy bills, Slocum said. Instead, Slocum said electric bills have risen as data centre demand increases. Slocum added: "Now we are seeing higher gas prices, and nobody knows where its going,\" linking the jump to wider market uncertainty.

Trump has played down the conflict’s cost and predicted prices will fall after fighting ends. Trump told reporters the conflict is a very small price to pay after years of terror from the Iranian leadership. Trump also said: \"Dig we must. Thats the Trump policy of lots of oil,\" at the White House.

At fuel stations, the change is already visible. AAA said the national average petrol price reached about USD 3.84 per gallon as of Wednesday. That followed Trump’s State of the Union claim last month that petrol was below USD 3, before the latest surge.

With midterm elections approaching and affordability a key issue, higher fuel costs may hit Republicans politically. Republican Sen Mike Rounds of South Dakota said: \"Were always concerned when gas prices go up.\" GOP Sen Thom Tillis of North Carolina added: \"Gas drives the affordability issue.\"

Trump fossil fuels policy versus renewable energy and climate rules

Trump has opposed renewable power for years, with a strong focus on offshore wind. Trump has called wind turbines ugly and expensive, and said they threaten birds and wildlife. Government statistics say cats are the biggest bird threat, followed by building collisions.

The National Audubon Society has warned that two-thirds of North American bird species could face extinction due to rising temperatures. In Trump’s second term, the administration has expanded tax breaks and sped permits for oil and gas drilling. It has also blocked clean energy projects and cancelled grants worth billions.

Trump has mocked clean energy support as the Green New Scam. Trump also told the United Nations last year: \"Climate change is the greatest con job ever perpetrated on the world, in my opinion,\" signalling continued resistance to climate action across federal policy.

These moves reversed policies under President Joe Biden. Biden pushed steps to cut pollution from power plants and other industries. Biden also supported electric vehicles. A regulation later reversed would have forced coal plants to capture smokestack emissions or shut down.

Biden and congressional Democrats approved nearly USD 375 billion for clean energy, described as the biggest climate spending by any nation. Trump and congressional Republicans moved quickly to undo those measures. Trump also repealed a scientific finding that climate change endangers public health and the environment.

Jason Bordoff of the Centre on Global Energy Policy at Columbia University pointed to the reversal’s message. Bordoff said: \"You see an administration that has said, quite literally through reversal of the Endangerment Finding, we shouldnt worry so much about climate change.\"

Bordoff said the wider policy view is shaped by domestic oil output. Bordoff said on Bloomberg Greens Zero podcast: \"Were the largest oil and gas producer in the world, so why buy all this clean energy stuff like EVs and solar panels from China?\"

Trump fossil fuels policy and emergency steps amid oil supply disruption

To ease price pressure, Trump has released millions of barrels from the US Strategic Petroleum Reserve. The administration also temporarily lifted sanctions on Russian oil shipments already at sea. Officials have discussed using the US Navy to escort tankers through the Strait of Hormuz.

The US is also negotiating with major Middle East crude buyers to join a coalition to police the waterway. Around one-fifth of the world’s traded oil usually passes through the Strait of Hormuz. Despite these actions, the market has stayed tight and prices remain elevated.

Gregory Brew, a senior analyst at the Eurasia Group, said the disruption is historic. Brew said: \"We are currently experiencing what is the largest oil supply disruption in history,\" at an event backed by the Cato Institute. Brew added prices may stay high for the foreseeable future.

Brew said Iran’s pressure strategy is likely to continue. Brew said the approach will keep playing out, and Trump will keep feeling the strain. The comments reflected concerns that shipping risks and political uncertainty could sustain higher costs across oil markets.

Energy Secretary Chris Wright said prices may stay high for weeks. Wright said the world will face near-term pain as the US and Israel try to defang Iran. Wright told ABC News on Sunday: \"Theres no guarantees in wars at all. This is short-term pain to get through to a much better place.\"

UN Secretary-General António Guterres linked the crisis to wider energy security risks. Guterres said the fastest route is a just transition away from fossil fuels and towards renewable energy. Guterres said: \"There are no price spikes for sunlight and no embargoes on the wind,\" as instability continues.

With inputs from PTI