President Donald Trump’s foreign policy has frequently been characterized by disruption and chaos, defined by trade wars, withdrawals from international treaties, and a dismissive attitude towards traditional allies.
This tumultuous landscape is heavily influenced by Trump’s ‘America First’ ideology and populist tendencies.
However, an often-overlooked element contributing to this disorder is the significant transformation in the U.S. economy over the last 15 years.
After decades as the world’s leading oil importer, the United States has emerged as the preeminent exporter of oil and gas, leading to dramatic geopolitical implications.
Historically, the United States has been a major oil producer since the nineteenth century.
However, following World War II, oil consumption began to exceed production capabilities.
By the first decade of the 2000s, the U.S. was importing over 13 million barrels of oil per day, cementing its status as the biggest oil importer worldwide.
Then, everything changed due to innovations associated with the shale revolution that unfolded between 2005 and 2010.
New techniques in hydraulic fracturing and horizontal drilling enabled American firms to extract vast quantities of oil and gas from shale reserves efficiently.
U.S. oil production surged, and since 2008, the country has doubled its share of crude oil output, even surpassing Saudi Arabia as the world’s leading crude oil producer by 2018.
This increase in production has allowed the United States to achieve energy self-sufficiency for the first time since the late 1940s.
The economic transformation has redefined the U.S. role on the world stage.
As a major oil importer, U.S. foreign policy focused on securing maritime trade routes and stabilizing markets while supporting international institutions.
Now, as a leading oil exporter, the mindset has shifted from that of a liberal hegemon to that of a classic petrostate.
The United States appears less invested in long-term international cooperation and more willing to use its production leverage for immediate gains in bilateral negotiations.
The influx of oil and gas wealth could initially be perceived as advantageous, potentially funding generous domestic welfare programs or foreign assistance.
Yet, this wealth might also induce significant challenges.
Countries rich in petroleum often exhibit traits such as autocratic governance, aggressive foreign policies, and heightened corruption levels.
The trends emerging in the U.S. foreign policy landscape echo those previously observed in oil-rich states like Venezuela, Iraq, and Russia.
Disruptive leaders such as Hugo Chávez, Saddam Hussein, Vladimir Putin, and Muammar al-Qaddafi capitalized on their countries’ energy wealth in destabilizing ways.
Several factors contribute to the United States’ shift in global approach, including the rise of President Trump, a surge in right-wing populism, and a domestic backlash against globalization and free trade.
While the U.S. economy remains more diversified than other leading oil exporters, it is the country’s growing influence in oil and gas production that is pivotal in shaping today’s global disorder.
This new position reduces U.S. financial motivation to uphold stability abroad and provides leverage over energy importer allies, fueling Trump’s agenda.
From America’s newfound energy dominance, there may be a short-sighted view regarding the detrimental effects on global order.
The worldwide economy heavily relies on fossil fuels, which represent over one-third of global maritime trade by volume.
Most nations depend on consistent oil and gas supplies, whereby even minor disruptions can severely impact power grids, transportation networks, and industrial productivity.
Consequently, energy-importing countries are heavily invested in the stability of global markets, as their prosperity hinges on secure trade routes, stable prices, and predictable regulations.
A pronounced divide exists between oil importers and exporters in their cooperation levels with multilateral institutions.
Importing nations are generally more conducive to multilateralism, while exporting nations, particularly those with wealth, exhibit less inclination to collaborate on international norms.
Emerging problematic behaviors can be observed in two types of exporters: isolationists, who limit their involvement in multilateral affairs, and disruptors, who actively contravene global standards and may project military force, such as countries like Iran and Russia.
Under the Trump administration, U.S. foreign policy resembles both these categories.
Like isolationist states, it has distanced itself from international agreements, while, akin to disruptive nations, it has shown interest in territorial expansion.
The surge in oil exports has afforded the United States new leverage over its oil-importing allies in regions like Europe and East Asia, exposing vulnerabilities within these alliances.
European nations, heavily reliant on energy from Russia, have found themselves increasingly at risk of coercion.
As evidenced during Trump’s presidency, Europe’s dependence on Russian gas raised alarms.
Following Russia’s full-scale invasion of Ukraine in 2022, Europe sought greater energy supplies from the U.S., with American crude oil becoming the continent’s largest import.
Currently, the U.S. provides approximately 45 percent of Europe’s liquefied natural gas, affording the Trump administration increased leverage while prompting demands for trade concessions.
This energy reliance further underscores strategic vulnerabilities as European nations cannot impose tariffs on U.S. crude oil without enduring severe economic consequences.
Such dynamics furnish Washington with powerful tools for influence.
In the long run, oil wealth can adversely affect broader trade prospects for exporting nations.
As the price of oil rises, major exporters tend to experience currency appreciation, which leads to diminished competitiveness in other export markets due to the ‘Dutch disease’ phenomenon, observable within the United States since the shale boom.
Rising oil prices alongside a stronger U.S. dollar may exacerbate trade imbalances, rendering American products more expensive and less competitive globally.
The realization of U.S. energy independence also diminishes the incentive to enforce global stability, particularly in regions that were vital to its energy security in the past.
Only a decade ago, the United States shared concerns with China and Europe regarding Middle Eastern oil, aligning efforts to safeguard strategic trade chokepoints like the Suez Canal.
However, as the U.S. has gained energy independence, motivation for such commitments has decreased.
In a leaked Signal group chat, Vice President JD Vance articulated this changing mindset, suggesting that countering Houthi threats along the Red Sea should fall to Europe, citing that only three percent of U.S. trade transits through the Suez Canal, compared to 40 percent of European trade.
Although the U.S. did ultimately carry out strikes against Houthi forces, Vance’s comments illustrated a growing indifference to global stability issues.
Previous administrations viewed such stability as a common interest, whereas the current administration perceives it largely as the responsibility of others.
The United States’ withdrawal from the rules-based order has developed over time.
A decline in U.S. support for free trade can be traced back to the mid-2010s, coinciding with the surge in shale oil and gas production.
During his second term, President Barack Obama refrained from appointing appellate judges to the World Trade Organization, effectively undermining the organization’s dispute resolution capacities.
This maneuver set the stage for subsequent actions: during his first term, President Trump implemented widespread tariffs.
The Biden administration maintained many of those tariffs, skipped W.T.O. judge appointments, and introduced new protectionist industrial policies—actions that appeared to conflict with W.T.O. regulations.
This erosion of U.S. commitment to multilateral trade cooperation correlates strongly with the experiences of the shale boom.
Beyond the international ramifications, the shale revolution has also reshaped domestic U.S. politics.
In the lead-up to 2024, almost 90 percent of campaign contributions from the oil and gas sector flowed to Republican candidates.
This financial backing has incentivized the Trump administration to embark on aggressive fossil fuel extraction initiatives, curtail clean energy projects, halt environmental data collection, and relax regulations on federal lands to accommodate oil and gas drilling.
The Environmental Protection Agency administrator, Lee Zeldin, has even announced intentions to reverse a critical 2009 ruling on greenhouse gases.
Trump’s energy policy possesses an inherent contradiction: on one hand, he emphasizes ‘Unleashing American Energy’ to facilitate swift oil and gas drilling while implying the goal of lowering oil prices to $50 per barrel in hopes of combating inflation.
Such a price point would reduce consumer gasoline costs but could also render extensive U.S. shale operations financially unviable.
Analysts project a downturn in U.S. oil production by the year 2025, contradicting Trump’s rallying cry to ‘drill, baby, drill.’
Although many of Trump’s tariffs may spare the oil and gas industry, the broader ramifications of his trade policies could culminate in reduced oil prices and dampened global demand for fossil fuels.
In summary, while some of Trump’s strategies align with the idea of energy hegemony, others pose challenges to sustaining that dominance.
Policy incoherence is typical of Trump’s leadership style, and many petrostates grapple with the same dilemmas: balancing the desire for elevated oil prices for export revenue and the need to maintain lower domestic prices to placate their citizens.
As long as the United States retains its position as the world’s leading energy producer, the temptation will linger to leverage this advantage for trade concessions, disengage from costly obligations, and favor short-term gains over long-standing alliances.
While energy dominance may initially appear advantageous for the future of American power, without careful restraint from the government, this strategy could yield detrimental outcomes.
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