> ## Content Index > Fetch the complete content index at: https://libertys-lens.ghost.io/llms.txt > Use this file to discover other available public pages before exploring further. # Iran Is Weaponizing Energy — Welcome to the New Economic Normal - URL: https://libertys-lens.ghost.io/iran-is-weaponizing-energy-welcome/ - Published: 2026-03-28T21:48:20.000Z - Updated: 2026-08-13T16:49:15.000Z - Description: How asymmetric energy shocks exposed the fragility of a globalized economy - Author: Graham Baughman - Tags: Newsletter, #Migrated-1786639647847, #Import 2026-08-13 16:47 **Liberty’s Lens is entirely reader‑supported.** We don’t answer to corporate masters deciding what we say or what we cover. If you find our work valuable, please consider upgrading to a paid subscription. You can take **20% off with** [**this coupon**](#/portal/signup) — and support independent media for about the price of a coffee per month. [Get 20% off forever](#/portal/signup) You can also gift a paid subscription to a friend who’d appreciate what we do. Thank you to every reader who shares our work and helps it reach new audiences. We couldn’t do this without you. We love you all. --- ![](https://storage.ghost.io/c/da/86/da86ac05-de21-4736-8a14-89823a268247/content/images/2026/08/624c9134-64bb-432e-b2fd-c91000327277_1536x1024.png) ### The Return of the Energy Weapon There’s really nothing new about energy being used as a weapon in geopolitics. Angered by Western support for Israel during the Yom Kippur War, Arab oil‑exporting states imposed an embargo that reshaped global energy politics. The 1973 Arab oil embargo led to gasoline shortages, rationing, and eventually an extended period of stagflation. The generational trauma that followed has shaped American energy policy ever since. Historians widely agree that access to oil was decisive in both World Wars. Japan’s attack on Pearl Harbor followed the loss of oil supplies that left its leaders with vanishing strategic options, while Allied access to petroleum helped shape the outcome of World War I. Energy supply has always been entwined with military power and geopolitical outcomes. [Subscribe now](#/portal/signup) What changed for a time wasn’t the nature of energy — it was the world’s assumptions. For decades, policymakers and markets behaved as if the era of energy coercion had faded into history. We entered a period of globalization and relatively cooperative geopolitics, with a growing belief that economic integration — through institutions like the World Trade Organization and other frameworks — would reduce conflict and risk. Markets were well supplied, U.S. production surged, and power demand in the United States and Europe remained largely flat for decades. That combination fostered a sense that energy security risks were largely a thing of the past. That assumption has now collapsed. Donald Trump has aggressively destabilized the global order — threatening allies, deposing or capturing foreign leaders, and launching a war with Iran without meaningful consultation beyond Israel. In a world shaped by those choices, there is little reason energy would not once again re‑emerge as both a powerful weapon and a profound vulnerability. We’ve already seen the consequences. Russia cut off gas supplies to Europe after invading Ukraine. China restricted rare‑earth exports, sending shockwaves through global markets. These weren’t abstract warnings — they were concrete demonstrations of how supply chains can be turned into leverage. Energy is once again central to geopolitics — not as a background condition, but as a frontline tool. --- ### Iran’s Lesson: Cheap Asymmetric Leverage Beats Diplomacy The asymmetric nature of this moment is what many people still underestimate. It doesn’t take much to throw the global energy system into chaos. That is the leverage Iran is exploiting — and the lesson other actors are closely studying. Iran does not need to win a conventional war to impose enormous costs. It does not need a fleet of battleships. It can generate massive disruption simply by making the world believe that energy traffic is unsafe — or by demonstrating, even intermittently, that this belief is justified. That is the essence of the energy weapon: it is cheap relative to conventional military power, profoundly asymmetric, and capable of imposing global pain without matching military strength. You don’t need to win the war. You need to create enough uncertainty to force other economies to react. And it works. For the time being at least, Iran has secured meaningful sanctions relief from the United States — more than it achieved through years of negotiation over its nuclear program — simply by destabilizing the global energy market. That is an extraordinarily powerful signal. Iran did not need to physically seal the Strait of Hormuz shut. It only needed to create a credible perception of risk — the belief that escalation was possible — and that alone was enough to drive prices higher and force policy shifts in Washington. So yes, Iran is learning. But the more unsettling reality is that everyone else is learning too. --- ### The U.S. Lesson: “Energy Independence” Was Always a Myth There are lessons the United States should be learning from this, whether or not it actually is. The first is the myth of energy independence. There have been real economic and geopolitical benefits from moving from a country that was importing about 60 percent of its oil two decades ago to being the largest producer of oil in the world and a major net exporter. Increased supply, however, does not mean the United States is independent. Policy matters too. Decisions made during the Obama era — particularly the repeal of the crude oil export ban imposed after the 1970s embargo — opened U.S. production more fully to global markets and played a major role in the surge in output that followed. By linking domestic production to global demand, those changes created powerful incentives for investment, scale, and innovation to flourish. That integration brought benefits — but it also came with costs. Without an oil export ban — and arguably not even with one — production capacity does not insulate the country from events unfolding halfway around the world. Because oil is priced globally, disruptions elsewhere still affect prices here. Being a large producer does not protect consumers from global shocks. If supply is disrupted abroad — whether by one, two, or ten million barrels per day — global prices rise. And the price at the pump remains anchored to that global benchmark even when the country produces a great deal of oil itself. Producers sell to the highest bidder; they do not bear losses out of national loyalty. So if the goal is to reduce vulnerability to geopolitical crises like this, the most effective answer is not simply “produce more.” It is “use less.” Using less oil reduces exposure to these shocks altogether. It reduces the leverage other countries can exert through chokepoints and disruptions. That does not mean domestic production is irrelevant. The United States may have policy options worth considering. But production alone is not a silver bullet. And this moment underscores a deeper, uncomfortable reality: when energy becomes the binding constraint, foreign policy options narrow. As economic pain intensifies, the range of politically viable choices shrinks — and adversaries understand that perfectly well. --- ### Petro‑Power vs. the Electro‑State: Two Competing Strategies If you look at the strategic divergence taking shape around the world right now, two very different bets are clearly emerging. One is a bet on **petro‑power** — doubling down on oil and gas production and treating fossil energy as a source of leverage and security. This approach assumes that control over consumable energy exports translates into geopolitical freedom of action and insulation from coercion. The other is a bet on **electrification** — moving as much of the economy as possible away from direct dependence on oil and into electricity, and then trying to produce that electricity domestically by leveraging renewable resources wherever possible. Donald Trump has pursued the petro‑power strategy aggressively, seeking to expand U.S. control and influence over fossil‑fuel reserves abroad. Venezuela is the clearest example, where his administration openly framed regime change around control of the country’s oil resources. The underlying belief appears straightforward: with enough U.S. production, Gulf state relationships, plus Venezuelan and potentially Iranian oil, the United States could wield enormous strategic power. China, by contrast, has been racing to electrify its economy and dominate the clean‑energy supply chain. It is extremely difficult to compete with China on cost. Despite tariffs and industrial policy efforts in the United States, many countries increasingly see China as the more viable partner for an energy transition — particularly after Donald Trump reversed course on U.S. electrification and clean‑energy initiatives, undermining long‑term confidence in American leadership on this front. In effect, China is positioning itself as the supplier for a future global **electro‑state**. That creates an awkward tradeoff for the rest of the world — and one most countries cannot avoid. If you are import‑dependent and watching energy chokepoints repeatedly turn into weapons, the natural response is to say: we need to electrify more and produce more energy at home. But the fastest path to doing that often runs through China — requiring imports of batteries, solar panels, electric vehicles, and processed critical minerals. This is why the current crisis carries an underappreciated second‑order effect: the push to electrify deepens dependence on a single clean‑energy supplier at the very moment countries are trying to escape energy coercion. In the long run, that is how China can emerge as a relative winner — even while it absorbs short‑term pain from higher oil prices. It is positioning itself to supply the world’s escape route. --- ### The Global Response: Insulation, Autarky‑ish Thinking, and Expensive Redundancy One consequence of repeated energy shocks is not just higher prices — it’s a structural shift in how countries think about risk. After the energy crises of the 1970s, a central response was deeper cooperation and interconnectedness. Strategic petroleum stocks were coordinated. Markets were structured to reallocate supply when disruptions hit. The goal was resilience through integration. When you hear about a coordinated release of more than 400 million barrels of oil from global strategic reserves to address today’s supply shock, that’s the legacy of that era. The International Energy Agency — a coalition of advanced economies acting in concert — exists precisely to stabilize markets in moments like this, on the assumption that shared systems are safer than unilateral responses. ([Al Jazeera](https://www.aljazeera.com/news/2026/3/23/which-countries-have-strategic-oil-reserves-and-how-much?ref=libertys-lens.ghost.io) | [IEA](https://www.iea.org/news/iea-confirms-member-country-contributions-to-collective-action-to-release-oil-stocks-in-response-to-middle-east-disruptions?ref=libertys-lens.ghost.io)) But that assumption is under growing strain. In a world where the international order feels less stable and trust in coordination has eroded, the response to repeated shocks may start to look very different. Countries increasingly conclude that they need to take care of themselves. That means thinking in more autarkic terms: prioritizing domestic energy production, reducing imports, and limiting vulnerability created by global interdependence. But insulation carries real costs. It is expensive to duplicate supply chains within national borders. It is expensive to rebuild refining capacity, processing facilities, or clean‑energy manufacturing domestically instead of relying on the most efficient global producers. And it is expensive to build redundancy against shocks that may never materialize. The irony is that “energy security” often proves more costly in the long run. Insulation can reduce exposure to disruption, but it does so by raising baseline prices and fragmenting markets — trading long‑term efficiency for greater resilience to future shocks. --- ### The Grim Implication: More Weaponization, More Volatility, More Crisis‑Prone Markets In a speech earlier this year, Singapore’s Prime Minister Lawrence Wong offered a clear-eyed assessment of the world many countries grew up in — and the one now slipping away. He described a post‑war, rules‑based international order “**shaped and underwritten by American leadership**,” an order that created the conditions for countries like Singapore to integrate into global markets, raise living standards, and pursue development with confidence ([The Straits Times](https://www.straitstimes.com/singapore/us-led-world-order-that-allowed-singapore-to-thrive-is-fraying-pm-wong?ref=libertys-lens.ghost.io)). That system, Wong emphasized, was never perfect. But it provided something invaluable: stability and predictability over decades. Today, he warned, “**the conditions that sustained it no longer hold**.” As the United States steps back from its traditional role as guarantor of global order — and with no other power willing or able to fill the vacuum — the consequences are already visible. Wong described an emerging world that is “**far more uncertain and fragmented**,” where economic tools are increasingly used for strategic ends and countries turn inward to protect their own interests. That shift has concrete consequences. The era of deep coordination and shared resilience is giving way to a world where energy coercion is no longer an exception. It is becoming a recurring tool. Once states learn that relatively cheap threats to energy flows can extract real concessions, the incentive to wield that weapon grows. Once markets internalize geopolitical risk across chokepoints and infrastructure, the cost of doing business rises. Once countries respond by insulating themselves — duplicating supply chains and paying for redundancy — the global system becomes more expensive and, at a systemic level, more brittle. And once the world accepts that chokepoints can be weaponized and critical energy infrastructure targeted, global financial uncertainty stops being episodic. Crises no longer unwind cleanly. Disruptions outlast the headlines. Volatility becomes a permanent feature rather than a temporary condition. This is what the crisis ultimately means: not simply that energy prices can spike, but that energy has once again reasserted itself as a central instrument of power — and that the world is reorganizing around that reality. [Buy me a coffee!](https://donate.stripe.com/5kQ5kF0iLfTD2ihcPxeIw02?ref=libertys-lens.ghost.io) --- ### Support Independent Journalism! ![](https://storage.ghost.io/c/da/86/da86ac05-de21-4736-8a14-89823a268247/content/images/2026/08/96a6ab8b-95e6-44f3-b45e-2cf5602699c3_1536x1024-5.png) Look around: media consolidation isn’t subtle anymore. A single ideological camp is amassing platforms—social networks, news outlets, streaming services—all under its banner. One by one, spaces for open dialogue are being converted into echo chambers. 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