Trump's Iran War Proves Fossil Fuel Addiction Is a National Security Disaster -- And Big Oil Is Cashing In

The War Dividend for Big Oil

Oil is trading at roughly $110 a barrel. Some forecasts predict it could hit $150. American oil and gas companies are set to pocket a $60 billion windfall from the Trump administration's manufactured conflict with Iran -- the third major global energy shock in six years, following Russia's invasion of Ukraine and the COVID-19 pandemic.

This is not an accident. This is the business model.

The war has laid bare a brutal reality: many of the world's most powerful countries and biggest greenhouse gas emitters directly benefit from high fossil fuel prices. They have no incentive to transition away from the energy sources that are simultaneously cooking the planet and making them rich.

"Fossil fuel dependency is ripping away national security and sovereignty and replacing it with subservience and rising costs," UN climate chief Simon Stiell said in March. He was talking about the global economy. He could have been talking about American foreign policy.

The Human Cost of Energy Dependence

While oil executives celebrate record profits, ordinary people are getting crushed. Food prices are spiking due to fertilizer supply disruptions. The World Food Programme USA warns that global food insecurity could reach record levels, with 45 million more people pushed into acute hunger.

Industries from steel to chemicals face shortages and soaring costs. Households worldwide are being told to turn down thermostats, take the bus, cycle, and cut highway speeds -- austerity measures to cope with a crisis manufactured by geopolitical recklessness and fossil fuel addiction.

Iran's oil revenues have increased despite attacks on its infrastructure that have sent toxic acid rain pouring down on its people. Russia's economy, which was floundering under the strain of its Ukraine war, has gotten a lifeline from soaring commodity prices and lifted sanctions. Saudi Arabia's state oil company Aramco has seen its share price surge even as Iranian missiles forced the kingdom to shut its biggest refinery.

High prices boost petrostates. They generate bonanzas these countries can pour into further expanding hydrocarbon extraction. The cycle perpetuates itself.

The Electrostates vs. Petrostates Divide

The Guardian's examination of the 10 countries most responsible for greenhouse gas emissions reveals a stark divide: those wedded to fossil fuels and determined to extract every last drop, and those pursuing a low-carbon future to break free from oil dependence.

"We are at the dawn of the electrostates versus petrostates, and electricity is the holy grail right now for everybody," former US Secretary of State John Kerry said. "The future is being able to harness the power of electrons and send them where we need them, and use them where and when we need them."

Global trends already favor renewables. Last year, electricity generated from low-carbon sources overtook coal-fired power for the first time. Investment in clean energy now outstrips fossil fuel investment by two to one. Coal-fired power generation fell in China and India for the first time since the 1970s.

But the Iran war -- and the Ukraine war before it -- have exposed which countries can expect to emerge stronger from energy crises and which remain vulnerable to price shocks and geopolitical manipulation.

China's Renewable Energy Surge

China, the world's biggest emitter and second-largest economy, is leading the charge toward an electrified future. The country's emissions have been flat or falling for nearly two years. While China has followed similar patterns before only to surge back to coal, analysts say this time is different.

Renewables are growing at record levels. Green technology -- including electric vehicles, batteries, wind and solar components -- now makes up more than a tenth of China's export business and a similar proportion of its overall economy.

"This emissions pattern is hopefully a decline that will be maintained," says Li Shuo, director of the China climate hub at the Asia Society Policy Institute. "There is no interest group in China advocating [for a swing back to coal] which gives us confidence that the trend is sustained and structural."

China added 360 gigawatts of new solar and wind capacity in 2024 and 430 gigawatts in 2025. Clean energy drove a third of the country's GDP growth last year. Investments in clean energy topped $1 trillion -- nearly four times the $260 billion China poured into fossil fuel extraction and coal power.

The question is whether China's "hand-in-hand" strategy of using coal alongside renewables will end as battery manufacturing ramps up. "Batteries may be able to meaningfully replace coal in China's power system," Li said. "I think we will see more batteries and less coal."

India's Renewable Acceleration

India, the world's most populous nation and fourth-largest economy, is also in the race. The country surprised observers in late March by producing a new national plan on greenhouse gas emissions under the Paris Agreement, setting a target of generating 60% of electricity from low-carbon sources by 2035.

India's renewable energy sector is growing rapidly. Last year saw a record 45 gigawatts of capacity added -- nearly double the previous amount. The Climate Action Tracker forecasts India will hit the 60% target five years early, by 2030.

This represents important progress for a country that last year celebrated its billionth tonne of coal production. But it also shows how far India still has to go.

The American Failure

The United States remains trapped in fossil fuel dependence -- not because renewables are unaffordable or technologically unfeasible, but because the Trump administration has actively sabotaged the transition while manufacturing conflicts that enrich oil companies.

The $60 billion windfall to American oil and gas companies from the Iran war is not a side effect. It is the point. When energy policy is dictated by fossil fuel interests and foreign policy is conducted to maximize their profits, national security becomes a euphemism for corporate welfare.

Every dollar Americans spend on inflated gas prices is a subsidy to an industry that has captured our government and is holding our economy hostage. Every spike in food insecurity is a consequence of choosing extraction over innovation.

The Iran war has made clear which countries are building the energy infrastructure of the future and which are clinging to the profitable wreckage of the past. The Trump administration has chosen the wreckage -- and American families are paying the price.