The Iran war did not create the global energy scramble, but it reinforced a trend that is reshaping alliances, trade, and national security.

The Iran war fits a pattern: the rise of energy as the lead national security issue for the global economy. The COVID pandemic caused major energy disruption and restructuring, trends that continued with the Ukraine war and deepened with the Iran conflict and the artificial intelligence (AI) revolution. Although ideology, multilateral alliance-building, and climate change remain factors in global geopolitics, having safe and secure energy trumps them all. 

The energy factor is a major consideration in the Trump administration’s shift toward fossil fuels, mostly oil and gas. In this, the United States is a superpower. Its rivals, China and Russia, also have their own energy agendas, while other countries are left grappling with a new geoeconomic game built up around energy security. The scramble is on to de-risk energy supply chains and develop better options.

Energy security was an important policy issue for Trump 1.0 and the Biden administration. However, it has taken on a greater sense of urgency with Trump 2.0. In its National Security Strategy, quietly released in December 2025, one of the points stressed was the centrality of energy: “We want the world’s most robust, productive, and innovative energy sector—one capable not just fueling American economic growth but of being one of America’s leading export industries in its own right.”

With the changes induced by the wars in Ukraine and Iran, as well as domestic policy shifts, the United States is a world leader in oil exports. It is also the number one LNG exporter, meeting 58 percent of Europe’s liquified natural gas (LNG) needs in 2025. The damage to Qatar’s Ras Laffan LNG facilities will take three to five years to repair, which hurts a major US LNG export rival.

Another element of US energy policy is a push to reduce dependency on China for critical minerals, including rare earths, many of which are key to the AI revolution. Indeed, the AI revolution is another factor pushing US policy to upgrade its energy grid and invest in mining companies. The last includes a $1.4 billion deal with mining and magnet maker Vulcan Elements, in which the Department of Defense’s Office of Strategic Capital is providing a $620 million Direct Loan. Magnets, which China dominates, are used to convert kinetic energy into electrical energy. 

The United States may not officially have an energy policy, but it is reading the changes in the global energy system, assessing the geopolitical risks associated with those changes, and acting on them by loosening regulations and providing financial support to various mining companies. This strategic thinking factors into US actions vis-à-vis Venezuela and Iran. 

China’s Energy Security Strategy

China places an emphasis on energy as a core national security concern. Its goal of being the global hegemonic power depends on it. While it has been forced to de-risk from more problematic oil suppliers, such as Iran and Venezuela, it has increased imports of Russian oil and gas, and Chinese oil companies are aggressively involved in oil and gas exploration and exploitation in such places as Angola, Argentina, and Guyana. 

Equally important is the development of alternative energy, encompassing wind and solar power, control of the commanding heights in critical-mineral mining and refining, and manufacturing larger batteries. China has few qualms about periodically tightening its exports of rare earths to the United States, Japan, and Europe as a reminder of its dominance in this area, which is badly needed for high-tech, consumer, and military applications, as well as in the renewable energy sector and batteries.

China’s economic statecraft, embodied in the Belt and Road Initiative (BRI), is an aggressive outreach to help other countries develop energy resources that can ultimately be tapped by China. This is observable in China’s global energy investment: since 2015, its official-sector institutions have committed on average over $55 billion annually to energy-related projects in emerging markets and developing economies. 

Finally, China’s stance on asserting its claim to the South China Sea, which holds massive oil and natural gas reserves, has become more aggressive. The Philippines and Vietnam are on the frontline of this issue, both of which have developed closer military cooperation with the United States as a counterweight. 

Russian Oil and Gas Remain a Geopolitical Tool 

Russia has some of the world’s largest reserves of oil and gas, which it supplies to China and India, among others. It still exports to Europe, supplying an estimated 6 percent of the EU’s LNG needs despite sanctions and Ukraine’s attacks on its energy infrastructure. No doubt the Kremlin looks forward to the day when the pipelines heading to Europe reopen. And there are people in Europe who would welcome that: Germany’s far-right AfD party is campaigning to resume Russian oil and gas imports as a means to reduce high energy costs (the old affordability issue) and supply disruptions caused by the Iran war. The AfD leads German national voting intention polls.

The Iran War Impact on the Rest of the World’s Energy

The Iran war has reinforced the strength of the US position in oil and natural gas production. The trend has also elevated other Western Hemisphere oil producers, such as Argentina, Brazil, Canada, Guyana, Suriname, and Venezuela. Indeed, the Western Hemisphere now produces more oil than the Middle East. 

The changing energy landscape is even bringing together traditional South American rivals, Argentina and Chile, to consider upping their energy cooperation. Most recently, this has encompassed the construction of a pipeline connecting Argentina’s major hydrocarbon region, Vaca Muerta, to Chilean ports, from which it could be exported to Asian markets. Plans are also underway to increase exports of Argentine gas and oil to Brazil. 

Europe Confronts a New Era of Energy Vulnerability

While the combination of Covid-19, the Ukraine War, and the Iran War has generally been to the Western Hemisphere’s advantage, it has hurt Europe. It seems one blow has followed another on the energy front, despite a sustained push to advance renewable energy sources. The core problems for European energy security remain an ongoing vulnerability to weaponized global supply chains (Russia and the Persian Gulf) and volatile oil and gas markets. 

A major change for Europe is that it has shifted away from Russia and diversified toward other oil and gas producers, forging new energy relationships, particularly in the Western Hemisphere. In 2024, European refiners bought 66 percent of Guyana’s total crude oil exports, an increase from 62 percent in 2023. Suriname looms large as well: France’s TotalEnergies and the United States’ APA are investing $10.3 billion to bring the country online, with similar volumes. Europe would be a natural buyer for the lighter Surinamese crude. African oil and gas are likely to see greater European engagement as different partnerships emerge.

Asia Accelerates Energy Diversification After Another Shock

Asian countries found themselves once again caught off guard and vulnerable to yet another energy shock. Among the most dependent on Middle Eastern oil are India (45 percent of its oil needs), Pakistan (78 percent), and South Korea (57 percent). Many of these countries are accelerating the development of new supply chains and investing in alternatives. 

Japan is probably the most proactive in addressing energy security. Although 77 percent of Japan’s crude oil comes from the Middle East, in recent years, it has cut its dependence on Middle Eastern LNG passing through the Strait of Hormuz to 6 percent of its energy needs; diversified oil and gas suppliers; maintained both nuclear and coal-powered electricity plants; and kept a domestic refining capacity. The oil factor has made Japan a more active actor in Asian maritime affairs, especially in the South China Sea. 

Middle Eastern States Seek Alternatives to the Strait of Hormuz

In the Middle East, the war is also causing major changes. De-risking from the old oil and gas infrastructure has now assumed greater urgency. While many countries were already reducing dependence on oil and gas and diversifying into other economic sectors, they are also seeking to reduce their reliance on the Strait of Hormuz as a pathway to global markets. Saudi Arabia and the UAE are working to circumvent the Persian Gulf by further developing pipelines that end in the Red Sea or the Indian Ocean. Saudi Arabia and Turkey signed agreements to develop a rail line that could, over time, extend to Oman and serve as a path around the Strait of Hormuz.

There is also an effort to secure supply chains that avoid Israel, which many see as destabilizing, as with Iran. Indeed, the fighting between Israel and Hezbollah in Lebanon raises questions over political risk in the Eastern Mediterranean’s gas fields (that span the waters off Cyprus, Lebanon, Israel, and Egypt).

One last development related to national security, as defined by energy, is the United Arab Emirates’ (UAE) departure from the Organization of the Petroleum Exporting Countries(OPEC) in May. This was done to provide the UAE greater leeway to work on security issues with the United States and Israel, pump more oil, and deal with changing national interests vis-à-vis Saudi Arabia. There is another important geoeconomic element. As Bindi Patel, Senior Analyst at GlobalData, notes: “This unprecedented withdrawal diminished OPEC’s collective stabilization leverage, transferring the primary cost burden of global oil production management directly onto Saudi Arabia.” 

Africa Benefits from Shifting Global Energy Investment

Africa has not been immune to the changing energy landscape. The Iran war serves as a subtle reminder to much of Africa that it cannot overlook the link between energy dependence and economic vulnerability, which has led to higher inflation, larger trade deficits, and social unrest. At the same time, the war has made Africa more attractive for oil and gas projects; between 2025 and 2030, an estimated 176 oil and gas projects are expected to start across the continent, representing an estimated $284 billion in investments. Africa’s role as an energy supplier has also been enhanced by deepwater oil discoveries in Namibia and Tanzania, as well as efforts to accelerate pipeline construction. While African countries have their own set of geopolitical risk factors, they are not located near Iran and Israel and are not under sanctions like Russia. 

AI and the Future of Global Energy Security

It is important to stress that the global energy transition is still underway, but it is decades away. In this, alternatives are not a replacement for oil and gas, but are additive to creating a larger energy pool, most of it oriented to generating electricity. This, too, has geopolitical implications, as it extends to climate change, water rights, ocean law, and space exploration. The bottom line is that in a changing global energy system, with energy security a prime consideration for policymakers, all sources of power are important. The AI revolution only enhances the importance of that factor. 

The AI revolution is transforming the global energy system. Its energy demands are immense, cascading from the construction of data centers to greater pressure on demand for critical minerals, reliable electric power generation, and transportation systems. One example of the intersection of energy geoeconomics and geopolitics is the Trump administration’s plans to bring 40 percent of Taiwan’s semiconductor production capacity to the United States by 2029. This would necessitate increased energy production, as the semiconductor industry is among the most energy-thirsty industries. 

Future Geopolitical Risks Could Trigger the Next Global Energy Crisis 

The Iran war comes at the end of a chain of major developments shaping global geoeconomics. Covid-19, the Ukraine War, and the Iran War are steppingstones to bigger events lurking around the corner. There is another event coming, which may come in the form of a Venezuelan attempt to take Guyana; the resumption of hostilities between the United States and Iran; another war elsewhere in the Middle East; a major systemic cyberattack against the US energy grid; a conflict in Africa that in the Horn of Africa with implications for passage through the Red Sea; or the spread of Ebola into Africa’s oil-producing areas. 

Disruption could also be caused by a US takeover of Greenland—would Europe still be willing to buy most of its oil and gas from the United States? And then there is the disruption that could spill from a Chinese effort to take Taiwan. In that case, energy would play a large role, raising the strategic importance of the Strait of Malacca as a chokepoint for China’s oil flows from the Middle East. Such a development would, in one way or another, pull in Japan, Singapore, Malaysia, Indonesia, and possibly India. 

The fun is just starting as countries grapple with the fragmentation of globalization, a renewed definition of national security driven by energy needs, and a greater willingness to use military means to achieve their aims. Having safe and steady energy provides a buffer for polities in a world that has become more Hobbesian. In considering the direction of global energy and the geoeconomic system, the words of Benjamin Franklin have considerable merit: “By failing to prepare, you are preparing to fail.” 

About the Authors: Scott B. MacDonald and Alejandro Trenchi 

Dr. Scott B. MacDonald is the chief economist for Smith’s Research & Gradings and a fellow with the Caribbean Policy Consortium. Prior to those positions, he worked for the Office of the Comptroller of the Currency, Credit Suisse, Donaldson, Lufkin and Jenrette, KWR International, and Mitsubishi Corporation. His most recent book is The New Cold War, China and the Caribbean (Palgrave Macmillan 2022).

Alejandro Trenchi is a PhD student in political science at the University of Florida. He previously served as the director of research and programs at Global Americans. He holds a BA in international studies from the University of Uruguay and a MS in political science from Leiden University. 

The post How the Iran War Is Reshaping Global Energy Security and Geopolitics appeared first on The National Interest.

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