When Donald Trump returned to the White House in 2025, “energy dominance” was the bedrock of his economic and foreign policy plans. But an unpopular war with Iran and soaring household fuel costs have now made energy policy a major liability for the US president heading into next month’s midterm elections.

Ironically, it was the US position as the world's top oil and gas producer, perhaps more than anything else, that enabled Trump to pursue foreign policy goals that may turn out to be the costliest of his political career.

In the first two years of Trump’s second term, vast US oil and gas resources emboldened Washington abroad, strengthened its hand in trade disputes and underpinned a broader effort to restore US geopolitical dominance.

Yet the Iran war exposed the central weakness in that vision: dominating energy production does not mean controlling energy prices.

What began as a pursuit of US energy independence evolved into a doctrine of energy dominance. That is now looking like energy hubris.

The foundations of Trump’s strategy were laid long before his return to office last year. The development of cost-effective techniques to tap the country's onshore shale basins transformed the US into the world’s largest producer of natural gas in 2009 and petroleum in 2018. By 2022, it was the leading exporter of liquefied natural gas, giving Washington unprecedented influence over global energy markets.

US crude production rose from around 5.5 million barrels per day in 2010 to nearly 14 million bpd today, around a fifth of global supplies, while the country also accounts for more than a quarter of global LNG exports. No single nation has ever occupied such a commanding position in the global energy system. Trump sought to turn that advantage into a governing doctrine.

On his first day back in office, he declared a national energy emergency and ordered the government to “unleash American energy”, prioritising oil, gas, coal and nuclear power while sidelining renewables.

Within weeks, he made “energy dominance” official US policy, establishing the National Energy Dominance Council and reviving his familiar “drill, baby, drill” slogan as the purported cure for elevated inflation and economic anxiety. In an October 2025 proclamation, Trump summed up the philosophy as “maximum production, maximum prosperity, and maximum power”. This doctrine extended far beyond domestic energy policy.

The administration’s national security strategy, published last December, explicitly linked US influence in the Western Hemisphere to energy dominance, drawing on the 19th-century Monroe Doctrine that sought to oppose European political intervention in the region.

In a little over a year, the administration wielded US oil and LNG exports in trade negotiations, promoted energy deals as part of efforts to end the Russia-Ukraine war, and highlighted Greenland’s resource wealth in a push for greater influence over the Arctic territory.

The high-water mark for Trump’s energy doctrine arguably came early this year after Washington removed Venezuelan President Nicolas Maduro in a swift military operation.

The US subsequently took control of Venezuelan oil exports and revenues, forced through changes to the country’s hydrocarbons legislation that displaced Chinese companies, and secured an unprecedented agreement granting it access to a fifth of Venezuela’s oil reserves.

By February, Trump’s vision of building an economy and foreign policy around abundant fossil fuel resources appeared to be taking root. The US possessed not only more energy than any rival, but also the ability to use that abundance to shape trade, diplomacy and security.

Trump’s decision to go to war with Iran in late February put that doctrine to the test.

The president initially claimed that the joint campaign with Israel against Iran would last only a few weeks. He also repeatedly indicated that vast US oil and gas resources, together with newfound access to Venezuela’s oil wealth, would shield the economy from any resulting spike in energy costs, which he also suggested would be brief. Those assumptions have not aged well.

The war launched on February 28 led to the effective closure of the Strait of Hormuz, through which roughly one-fifth of global energy supplies used to flow, triggering one of the largest energy disruptions in modern history. Middle Eastern producers cut output and rerouted exports where possible, while major importers across Asia reduced consumption.

This caused oil prices to nearly double in the first two months of the conflict, with global benchmark Brent crude peaking at $118 a barrel in March.

That was well below the record $145 reached in 2008, when Iran-related geopolitical tensions, surging Chinese demand and a weakening US dollar drove prices higher. It was also far less than many had feared, largely thanks to reduced Chinese oil imports, ample crude stocks and the surprising adaptability of global markets. But it still represented a severe shock.

Moreover, the risk premium from the Iran war is becoming entrenched. Even though crude flows from the Middle East have mostly recovered, Brent is trading around $110.

The conflict has also spread across the Middle East, pulling in most of Washington's Gulf allies, most notably the United Arab Emirates and Saudi Arabia, which have suffered multiple deadly attacks by Yemen’s Iran-aligned Houthis. This has upended the market’s confidence in the security of Middle Eastern crude, unravelled longstanding supply routes and sent shipping prices skyrocketing.

Trump wanted to put his stamp on global energy markets, but this was clearly not what he had in mind.

In one respect, the 2026 energy shock has vindicated Trump’s strategy. The war cemented the US position as the world’s top supplier of crude, refined fuels and LNG, delivering enormous profits to domestic producers and exporters and allowing the US to expand its position in the global market.

Energy independence certainly offered US consumers some protection against the energy shock, particularly compared with Asian economies, where prices and demand destruction were much more extreme this year. But that protection has been far from ironclad.

US gasoline prices at the pump climbed above $4.60 a gallon in May, the highest level since 2022, while diesel surged to a record $6.50 a gallon in September as global refining capacity was squeezed.

Those increases rapidly became a political problem for the White House as cost-of-living concerns moved to the forefront of the campaign ahead of the midterms on November 3.

The administration sought to contain the fuel-price spike by pulling almost every available lever, including easing biofuel blending mandates and, most controversially, reaching a diesel supply agreement with Russian President Vladimir Putin. This dynamic underscores the difference between commanding supply and controlling prices.

Oil, LNG and refined fuels are internationally traded commodities. US producers sell them at prices shaped by global supply and demand. They don’t typically reserve cheap energy for American households.

While Trump briefly floated the idea of a diesel export ban, officials ultimately rejected it. Even though a ban might have brought down domestic prices initially, it would likely have resulted in higher fuel prices over the medium term due to global market dynamics.

The administration’s assertion last October that “energy security is national security” appears more relevant than ever. The Iran war has shown that cheap and reliable energy is essential for economic growth, whether it powers heavy industry or the data centres underpinning the artificial intelligence race. But the conflict has also changed the meaning of energy security.

For countries dependent on imports, particularly many in Asia, the shock has revealed the risks of relying heavily on distant suppliers, vulnerable shipping routes and a concentrated global refining system. Their response is likely to be broader diversification: securing more suppliers, expanding domestic fossil fuel production where possible, accelerating renewable power and shifting more transport towards electricity.

That will not kick the US off its lofty energy perch, but it will likely weaken the allure of oil and gas for many countries over the coming years.

Trump likely felt emboldened to embark on the Iran war — something his predecessors had baulked at — precisely because US energy independence made a Middle East adventure seem less risky than it had when the US was heavily reliant on Gulf oil and gas.

But the conflict has, perhaps permanently, undermined Trump’s promise that energy dominance would guarantee low prices and economic security at home. Hubris can be a dangerous thing.