by Umair Irfan
The United States has been chasing the rhetorical goal of energy independence — the ability to produce enough domestic energy to be essentially free of dependence on imports — since the energy crisis of the 1970s exposed the country’s reliance on Mideast oil. President Donald Trump has put his own spin on the idea, pushing beyond independence to “energy dominance.”
If you look just at oil extraction, the US seems to have succeeded. Thanks to the fracking revolution, it is now the largest oil producer in the world, and it exports more petroleum and other liquid fuels than it imports. The US is, in fact, a dominant player in the global energy market.
But as the US and Israel’s attacks on Iran this week have revealed, being dominant in energy isn’t the same thing as being independent. What you’re paying at the pump now is directly connected to what’s happening 6,000 miles away. Because of attacks on shipping and oil infrastructure, gasoline prices are rising across the country, reaching an average of $3.25. The last time prices jumped this high this fast was in March 2022, when Russia launched its full invasion of Ukraine. Even Trump was forced to awkwardly acknowledge the reality.
“So if we have a little high oil prices for a little while, but as soon as this ends, those prices are going to drop, I believe lower than even before,” Trump told reporters on Tuesday. Trump has also tasked his Cabinet to look for any way they can to keep gasoline prices down.
One sign of the rising danger is that Trump also said on his social media platform that the US would offer political risk insurance for shipping through the Strait of Hormuz and possibly naval escorts, particularly for oil tankers, after transits drastically slowed. Twenty percent of the world’s petroleum consumption and 20 percent of natural gas flows through the Strait of Hormuz. Iran itself is the world’s fifth-largest oil producer, and its oil facilities are under attack. It’s now launching its own strikes on oil tankers. We’ve seen shocks to the global oil and gas sector before, but this is the big one.
“We’re living through the geopolitical nightmare for markets,” said Sam Ori, executive director of the Energy Policy Institute at the University of Chicago. “This is the crisis that has kept people up at night.”
And with the route throttled, Americans are likely to see even higher gasoline prices in the weeks to come. For most Americans, gasoline is their single-highest energy expense, averaging $2,930 per household in 2024. Adjusting for inflation, the US has been blessed with fairly steady gasoline prices over the decades, so a big, sudden price spike will hit households hard.
All of which raises the question: If the US is producing more oil than ever, how are we still vulnerable to supply shocks occurring half a world away?
Why we may never achieve “energy independence”
It sounds straightforward in its wording, but energy independence has always been an ill-defined, unachievable goal, no matter how many presidents invoke it. Depending on who you ask, it means reaching self-sufficiency in energy production or immunity from foreign turmoil. But even if the US sourced every drop of oil we use from within our borders, we would still be vulnerable to international price shocks for one simple fact: Oil is a globally traded commodity. Its price is set not by how much the US extracts at home, but by the international laws of supply and demand.
”A disruption in the flow of oil anywhere affects prices everywhere,” Ori said. “No matter how much oil you produce, no country is insulated from the volatility of the global oil market.”
…
So is energy independence a worthwhile goal, even in theory?
“No, it’s not,” Ori said. “I don’t think ‘energy independence’ is a useful concept at all.”
It may not sound as good, but a better goalpost than “energy independence” is “energy security,” ensuring an uninterrupted flow of hydrocarbons and electrons at an affordable price. And that requires both strong domestic production and secure sources from abroad. “To really maximize energy security, you want to minimize the way that volatility can affect your economy,” Ori said. That means building durable relationships with trading partners. It also means reducing our dependence on all oil, mainly in the transportation sector.