Ivo Daalder, a former U.S. ambassador to NATO, is a senior fellow at Harvard University’s Belfer Center and host of the weekly podcast “World Review with Ivo Daalder.” He writes POLITICO’s From Across the Pond column. Like many, I used to believe that former U.S. President George W. Bush’s decision to invade Iraq in 2003 was the biggest strategic mistake America had made, at least since the Vietnam War. That is, until now. U.S. President Donald Trump’s decision to join Israel in a war against Iran is a far bigger strategic error, and one with far bigger strategic consequences. The reasons for this are many, ranging from the immediate impact on the region and the global economy to the longer-term upshots for Russia and China, as well as the repercussions for U.S. alliances and America’s global standing. That much is already clear — and we’re only three weeks in. Let’s start with the similarities: Much like the Iraq War, the war against Iran began based on the presumption that the regime in power would swiftly fall and that a new, more moderate and less antagonistic one would take its place. In both instances, the idea was to remove the greatest destabilizing threat in the Middle East — Saddam Hussein’s regime in the initial case, the theocratic dictatorship in Tehran in the latter — through the swift and decisive use of military force. But while Bush understood that defeating a regime required ground forces, it seems Trump simply hoped that airpower alone would suffice. As a result, Hussein’s regime fell swiftly — though Bush did vastly underestimate what would be required to rebuild a stable, let alone a democratic, Iraq in its place. But the Iranian government, as U.S. intelligence officials themselves have testified, “appears to be intact” despite Israel killing many of its key political and security leaders through targeted strikes. Focusing on the region at large, Bush’s misjudgment eventually contributed to a large-scale insurgency, which strengthened Iran’s influence in Iraq and the wider Middle East. In contrast, Trump’s miscalculation has left in place a regime that, aside from assuring its own survival, is now singularly focused on inflicting as much damage on the U.S. and its allies as it possibly can. Iranian drones and missiles have already attacked Israel and the Gulf states, targeted critical energy production facilities and effectively closed the Strait of Hormuz, which hosts one-fifth of the world’s oil and gas export transits. The Salalah oil storage fire in Oman is pictured on March 13, 2026. | Gallo Images/Orbital Horizon/Copernicus Sentinel Data 2026 Less than a month in, the world is now witnessing the largest oil and gas disruption in history. And as the fighting escalates to include gas and oil production infrastructure, the global economic consequences will be felt by every single country for months, if not years, to come — even if the conflict were to end soon. The damage that has already been inflicted on the global economy is far greater than the economic consequences of the Iraq War in its entirety. But that’s not all. Geopolitically, the U.S.-Israel war with Iran will also have far greater reverberations than the war in Iraq ever did. For one, the Bush administration spent a lot of time and effort trying to get allies on board to participate in and support the war. It didn’t fully succeed in this, as key allies like Germany and France continued opposing the war. But it tried. Trump, by contrast, didn’t even try to get America’s most important allies on board. Not only that, he even failed to inform them of his decision. And yet, when Iran responded predictably by closing the Strait of Hormuz, the U.S. president then demanded allies send their navies to escort tankers — despite the U.S. Navy so far refusing to do so. And while it’s true that Iraq left many U.S. allies — even those that joined the war, like the U.K. — deeply scarred, Iran has convinced U.S. allies they can no longer rely on the U.S., and that Washington is now a real threat to their economic security. That, too, will have a lasting impact well beyond anything the war in Iraq did. Finally, the fact remains that when Bush decided to invade Iraq, Russia and China were still minor global powers. Russian President Vladimir Putin was only just starting his effort to stabilize the economy and rebuild Russia’s military power, while China had just joined the World Trade Organization and was still a decade or more away from becoming an economic superpower. In other words, America’s blunder in Iraq occurred at a time when the strategic consequences for the global balance of power were still manageable. Trump’s Iran debacle is occurring at a time when China is effectively competing with the U.S. for global power and influence, and Russia is engaged in the largest military action in Europe since the end of World War II. A woman sifts through the rubble in her house in Tehran, Iran on March 15, 2026 after it was damaged by missile attacks two days before. | Majid Saeedi/Getty Images Both stand to benefit greatly. Russia is the short-term winner here. Oil prices are rising, generating more than $150 million per day in extra income for Moscow to feed its war machine. The U.S. is relaxing its sanctions against Russia in a vain attempt to stall prices from ballooning at the pump. All the while, Ukraine is being left to contend with Russia’s missile and drone attacks without the advanced defensive weaponry that’s now being used to protect Israel and the Gulf instead. China, meanwhile, is watching as the U.S. diverts its military forces from the Indo-Pacific to the Middle East, where they will likely remain for months, if not years. These forces include a carrier strike group, a Terminal High Altitude Area Defense anti-missile system from Korea, and a Marine Expeditionary Force from Japan. And while a disruption in oil and gas supply will be a short-term problem for Beijing too, China’s rapid transition to renewables and close alignment with energy-rich Russia will leave it well placed to confidently confront the future. Bush and Trump both came to office determined to avoid the mistaken wars of their predecessors. Nevertheless, they both embarked on military adventures fed by a hubristic belief in American power. But while the U.S. was strong enough — and its adversaries still weak enough — to recoup much of the damage inflicted by Bush’s war, the war unfolding in Iran today will leave behind an America that will have lost much of its global power, standing and influence, destined to confront rising adversaries all on its own.

YOKOSUKA, Japan — Germany is seeking to deepen defense ties with Japan, with Defense Minister Boris Pistorius proposing a new agreement to make it easier for troops from both countries to operate on each other’s territory. Speaking at Japan’s Yokosuka naval base after talks with Japanese Defense Minister Shinjirō Koizumi on Sunday, Pistorius said Berlin had floated a so-called Reciprocal Access Agreement — a framework designed to “ease the exchange of soldiers in each other’s countries and significantly reduce bureaucratic hurdles.” Such agreements allow partner countries to deploy troops on each other’s soil more easily for training, exercises or operations by streamlining legal and administrative procedures. Japan has signed similar deals with countries like the United Kingdom and Australia as it deepens its own security ties amid rising regional tensions. The proposal marks a step beyond Germany’s recent Indo-Pacific engagements, which have largely focused on joint exercises and short-term deployments. It signals a shift toward more structured military cooperation with Berlin’s partners in the region. Pistorius framed the move as part of a broader response to growing global instability. “How close our partnership is has become clear in light of the current developments in Iran and the Middle East,” he said, pointing to Japan’s heavy reliance on energy imports through the Strait of Hormuz. “The freedom of sea routes must be guaranteed and protected.” Germany and Japan share an interest in securing global trade routes, he added, stressing that both countries remain committed to the rules-based international order. “We are united by the conviction that the strength of the law must prevail,” Pistorius said. The initiative also reflects a broader strategic shift in Berlin and Tokyo. As both governments face rising pressure from authoritarian powers — from Russia’s war in Ukraine to China and North Korea in East Asia — they are increasingly treating their security challenges as interconnected, translating those shared concerns into closer bilateral defense cooperation.

The Trump administration is telling foreign officials and others that it will not reschedule a summit between the U.S. president and Chinese leader Xi Jinping until the Iran war ends. A Washington-based diplomat privy to U.S.-China summit planning confirmed that the administration has made clear “the next dates for the Trump-Xi summit will only be proposed after the active part of the Iran conflict is over.” A Washington-based individual close to the administration also briefed on White House summit planning confirmed the administration shared that timeline. POLITICO granted both the people anonymity because they were not authorized to speak publicly about sensitive diplomatic discussions. The U.S. State Department directed queries to the White House. The White House denied the summit timeline was tied to the Iran war. “This is fake news. The United States and China are having productive discussions about rescheduling President Trump’s visit — announcements are forthcoming,” White House spokesperson Anna Kelly said. The Chinese embassy said it had “no information to provide” about the possible delay in summit scheduling. The long-anticipated meeting between Trump and Xi had originally been planned for the end of March, but Trump said Monday the meeting would be pushed back “a month or so” because “we’ve got a war going on.” On Thursday, he said it would happen in “about a month and a half.” Speaking to reporters on Wednesday, White House spokesperson Karoline Leavitt suggested the meeting might not take place until after May. “The president has some things here at home in May that he has to attend to, and I’m sure President Xi is a very busy man, as well, so we’ll get the dates on the books as soon as we can,” Leavitt said. Tying the summit preparations to the end of the Iran conflict could mean additional delays to a meeting intended to maintain stability in a fragile U.S.-China trade truce. As the war on Iran enters its fourth week, the Trump administration appears to be preparing for a longer conflict. The U.S. has made detailed plans for the deployment of ground troops onto Iranian soil, CBS News reported Friday. The administration is also moving to dispatch thousands of troops to the region. Trump told reporters Thursday he’s “not putting troops anywhere” but then added: “If I were, I certainly wouldn’t tell you.” “There are operational constraints to managing a war from a foreign country — particularly a hostile one like China,” said the person close to the administration. “It would be terribly awkward for Trump and Xi to transact in this climate.” On Friday, Trump signaled a potential wind-down in the Iran conflict in a Truth Social post, suggesting the U.S. could scale back its role while pushing allies to take on more responsibility in securing the Strait of Hormuz, the major commercial waterway that connects the Persian Gulf to the Arabian Sea. “We are getting very close to meeting our objectives as we consider winding down our great military efforts in the Middle East,” Trump wrote. Trump and Xi made progress toward heading off an intensified trade war in an October meeting in South Korea. During that meeting, Xi committed to Chinese purchases of U.S. agricultural products like soybeans and the elimination of many of Beijing’s restrictions on critical minerals exports. In return, Trump agreed to extend a pause on triple-digit tariffs on Chinese goods. Wendy Cutler, a former negotiator in the U.S. Trade Representative’s office, argued this work can continue even if Trump and Xi don’t meet again in person. “The stabilization part of this won’t necessarily be jeopardized without a meeting,” she said. “Now, if something happens in the war, either foreseen or unforeseen, there’s just lots of flash points that can threaten this truce, which are unforeseeable at this period.” Rush Doshi, former senior director for China and Taiwan in the Biden administration, said a meeting between the two leaders is important to strengthening and maintaining the bilateral relationship. “Without leader-to-leader communication to manage a relationship of this complexity until the war is over — and there’s no sense of when the war is going to be over — there’s a real risk the relationship is going to be less stable than people might have expected,” said Doshi, now at the Council on Foreign Relations.

BERLIN — German Defense Minister Boris Pistorus will spend next week touring the Indo-Pacific with a passel of corporate chiefs in tow to make deals across the region. It’s part of an effort to mark a greater impact in an area where Berlin’s presence has been minor, but whose importance is growing as Germany looks to build up access to natural resources, technology and allies in a fracturing world. “If you look at the Indo-Pacific, Germany is essentially starting from scratch,” said Bastian Ernst, a defense lawmaker from Chancellor Friedrich Merz’s Christian Democrats. “We don’t have an established role yet, we’re only just beginning to figure out what that should be.” Pistorius leaves Friday on an eight-day tour to Japan, Singapore and Australia where he’ll be aiming to build relations with other like-minded middle powers — mirroring countries from France to Canada as they scramble to figure out new relationships in a world destabilized by Russia, China and a United States led by Donald Trump. “Germany recognizes this principle of interconnected theaters,” said Elli-Katharina Pohlkamp, visiting fellow of the Asia Programme at the European Council on Foreign Relations. Berlin, she said, “increasingly sees Europe’s focus on Russia and Asia’s focus on China and North Korea as security issues that are linked.” The military and defense emphasis of next week’s trip marks a departure from Berlin’s 2020 Indo-Pacific guidelines, which laid a much heavier focus on trade and diplomacy. Pistorius’ outreach will be especially important as Germany rapidly ramps up military spending at home. Berlin is on track to boost its defense budget to around €150 billion a year by the end of the decade and is preparing tens of billions in new procurement contracts. But not everything Germany needs can be sourced in Europe. Australia is one of the few alternatives to China in critical minerals essential to the defense industry. It’s a leading supplier of lithium and one of the only significant producers of separated rare earth materials outside China. Australia also looms over a key German defense contract. Berlin is considering whether to stick with a naval laser weapon being developed by homegrown firms Rheinmetall and MBDA, or team up with Australia’s EOS instead. That has become a more sensitive political question in Berlin. WELT, owned by POLITICO’s parent company Axel Springer, reported that lawmakers had stopped the planned contract for the German option, reflecting wider concern over whether Berlin should back a domestic system or move faster with a foreign one. That means what Pistorius sees in Australia could end up shaping a decision back in Germany. TALKING TO TOKYO Japan offers something different — not raw materials but military integration, logistics and technology.  Pohlkamp said the military side of the relationship with Japan is now “very much about interoperability and compatibility, built through joint exercises, mutual visits, closer staff work, expanded information exchange and mutual learning.” She described Japan as “a kind of yardstick for Germany,” a country that lives with “an enormous threat perception” not only militarily but also economically, because it is surrounded by pressure from China, North Korea and Russia.  The Japan-Germany Acquisition and Cross-Servicing Agreement took effect in July 2024, giving the two militaries a framework for reciprocal supplies and services and making future port calls for naval vessels, exercises and recurring cooperation easier to sustain.  Pohlkamp said what matters most to Tokyo are not headline-grabbing deployments but “plannable, recurring contributions, which are more valuable than big, one-off shows of force.” But that ambition only goes so far if Germany’s presence remains sporadic. Bundeswehr recruits march on the market square to take their ceremonial oath in Altenburg on March 19, 2026. | Bodo Schackow/picture alliance via Getty Images Berlin has sent military assets to the region for training exercises in recent years — a frigate in 2021, combat aircraft in 2022, army participation in 2023, and a larger naval mission in 2024. But as pressure grows on Germany to beef up its military to hold off Russia, along with its growing presence in Lithuania and its effort to keep supplying Ukraine with weapons, the attention given to Asia is shrinking. The government told parliament last year it sent no frigate in 2025, plans none in 2026 and has not yet decided on 2027. Germany’s current military engagement in the Indo-Pacific consists of a single P-8A Poseidon maritime patrol aircraft, sent to India in February as part of the Indo-Pacific Deployment 2026 exercises.  Germany, according to Ernst, is still “relatively blank” in the region. What it can contribute militarily remains narrow: “A bit of maritime patrol, a frigate, mine clearance.” Pohlkamp said Germany’s role in Asia is still being built “in small doses” and is largely symbolic. But what matters is whether Berlin can turn occasional visits and deployments into something steadier and more predictable. The defense ministry insists that is the point of Pistorius’s trip. Ministry spokesperson Mitko Müller said Wednesday that Europe and the Indo-Pacific are “inseparably linked,” citing the rules-based order, sea lanes, international law and the role of the two regions in global supply and value chains.  The new P-8A Poseidon reconnaissance aircraft stands in front of a technical hangar at Nordholz airbase on Nov. 20, 2025. | Christian Butt/picture alliance via Getty Images The trip is meant to focus on the regional security situation, expanding strategic dialogue, current and possible military cooperation, joint exercises including future Indo-Pacific deployments, and industrial cooperation. That explains why industry is traveling with Pistorius.  Müller said executives from Airbus, TKMS, MBDA, Quantum Systems, Diehl and Rohde & Schwarz are coming along, suggesting Berlin sees the trip as a chance to widen defense ties on the ground. But any larger German role in Asia would have to careful calibrated to avoid angering China — a key trading partner that is very wary of European powers expanding their regional presence. “That leaves Germany trying to do two things at once,” Pohlkamp said. “First, show up often enough to matter, but not so forcefully that it gets dragged into a confrontation it is neither politically nor militarily prepared to sustain.”

BRUSSELS — Anxiety is growing over Europe’s unusually low gas storage levels as the war in Iran threatens to spark a fight among countries over dwindling global energy supply. The EU requires member countries to maintain gas reserves at 90 percent of capacity by the winter — a measure brought in after Russia’s 2022 invasion of Ukraine. But this year’s colder-than-average winter depleted those reserves to under 30 percent as of March, the lowest since 2022. With gas prices soaring after Iranian attacks effectively closed the Strait of Hormuz — the narrow passage through which 20 percent of the world’s liquefied natural gas passes, of which 6 percent was bound for Europe —  the task of refilling those reserves by the winter carries a greater risk. Behind the scenes, government officials and industry lobbyists warn countries could rush to meet those targets all at once if the rules aren’t loosened, driving up demand and allowing traders to exploit soaring prices. That’s the dynamic that caused traders to bid up gas prices to over €300 per megawatt hour in 2022, with the lofty new storage targets compounding the sharp rise in demand that followed Russia’s supply cuts. Analysts say the difficulty in restocking those reserves will also be made more difficult by stiff competition from Asia, which is more directly exposed than Europe to the gas shipments that once flowed through the Persian Gulf. That could lead to higher mid-year gas prices, undercutting the incentive for traders to sell in the winter and store in the spring and summer. Officials stress it’s still early days. But already, multiple European governments have considered invoking existing carve-outs that allow them to relax storage targets in order to reduce the scope for bulk buying, according to three European energy officials familiar with the matter. Meanwhile, at least three countries believe the EU executive should introduce flexibilities beyond the existing framework, including lowering the target by as much as 30 percent, two of the officials said. The countries also sought a new EU mechanism to coordinate gas purchases, they added. Such policies would allow countries to fill up for the coming winter more comfortably. “With a lower target we would not be driving the demand for very high storage level filling, [and] driving the prices up,” said one of the people. The Commission hasn’t yet ruled on how best to respond, the people said. But it too has explicitly flagged the issue, both at a summit of energy ministers on Monday and previous gatherings of ambassadors and national energy experts over the past week, according to the people cited above and an EU official. A Commission spokesperson didn’t respond to a request for comment. In public, officials remain sanguine. For instance, Germany’s reserves are running at 22 percent capacity after Berlin pushed to lower its storage goals last year, but the country’s economy minister, Katherina Reiche, has downplayed the issue. Others are more nervous. “The status quo is unsustainable — existing mechanisms do not sufficiently ensure the security of gas supply because the incentives to fill gas storage facilities are inadequate,” Sebastian Heinermann, the managing director of German storage association INES, said in a statement Tuesday. Gas industry lobby group Eurogas has also warned that tough EU regulations governing cargoes of liquefied natural gas — which can be shipped to the highest bidder, as opposed to fixed supplies of pipeline gas — makes selling to Europe less appealing to many exporters. That further squeezes the EU’s chances of securing desperately needed fuel on an ever-tightening market.

President Donald Trump has often frustrated European allies with his overt entreaties to Russian President Vladimir Putin and harsh words for Ukrainian President Volodymyr Zelenskyy. But behind the seeming imbalance is a longer-term strategic goal – countering China. The Trump administration believes that incentivizing Russia to end the war in Ukraine, welcoming it back economically and showering it with U.S. investments, could eventually shift the global order away from China. It’s a gamble – and one Ukrainians are concerned with – but it underscores the administration’s belief that the biggest geopolitical threat facing the United States and the West is China, not Putin’s Russia. While countering China isn’t the only reason the administration wants a truce, it does help explain why after more than 15 months of fruitless talks and multiple threats to walk away, the president’s team – special envoy Steve Witkoff and son-in-law Jared Kushner – keep looking for a breakthrough. A Trump administration official, granted anonymity to discuss ongoing negotiations, said finding a “way to align closer with Russia” could create “a different power balance with China that could be very, very beneficial.” The administration’s desire to use Ukraine peace negotiations to counter China has not been previously reported. But many observers believe this plan has little hope of succeeding – at least while Putin and Chinese leader Xi Jinping remain in charge. And the idea of giving Russia economic incentives to grow closer to the U.S. is concerning for Ukraine, said a Ukrainian official, granted anonymity to discuss diplomatic matters. “We had such attempts in the past already and it led to nothing,” they said. “Germany had [Ostpolitik, Germany’s policy toward the East], for that and now Russia is fighting the deadliest war in Europe.” And when it comes to banking on breaking apart China and Russia, the Ukrainian official noted that both countries “have one [thing] in common which you can not beat – they hate the U.S. as a symbol of democracy.” Still, the strategy is in keeping with the administration’s broader foreign policy initiatives aimed at least in part in countering Chinese influence. Taking out Venezuelan leader Nicolás Maduro and pressuring Cuba’s government to the brink of collapse all diminishes China’s influence in the Western Hemisphere. The administration threatened Panama, which withdrew from Chinese leader Xi’s Belt and Road Initiative a month after Trump took office and called Peru’s deal with China surrounding its deepwater port in Chancay a “cautionary tale.” And striking Iran shifted China’s oil import potential, as Tehran supplied Beijing with more than 13 percent of its oil in 2025, according to Reuters. Indeed, the Trump administration official noted that between Venezuela, Iran and Russia, China was buying oil at below-market rates, subsidizing its consumption “to the tune of over $100 billion a year for the last several years.” “So that’s been a massive subsidy for China by being able to buy oil from these places on the black market, sometimes $30 a barrel lower than what the spot market is,” the person said. Even as there are reports that Russia is sharing intelligence with Iran, the U.S. and Russia keep talking. Witkoff and Kushner met with Kirill Dmitriev, a top adviser to Putin, last week. The Russians called the meeting “productive.” Witkoff said they’d keep talking. These negotiations and the broader efforts to counter China now take place under the spectre of Trump asking several countries, including China, for help securing the Strait of Hormuz. The National Security Strategy, released in November, spilled a fair amount of ink on China, though it often doesn’t mention Beijing directly. Many U.S. lawmakers — from both parties — consider China the gravest long-term threat to America’s global power. “There is a longstanding kind of U.S. strategic train of thought that says that having Russia and China working together is very much not in our interests, and finding ways to divide them, or at least tactically collaborate with the partner who’s less of a long term strategic threat to us,” said said Alexander Gray, Trump’s National Security Council chief of staff in his first term. Gray, who is currently the CEO of American Global Strategies, a consulting firm, compared the effort to former Secretary of State and national security adviser Henry Kissinger, who spearheaded President Richard Nixon’s trip to China during the Cold War in an effort to pull that country away from the Soviet Union. The State Department declined to comment for this report. However, a State Department spokesperson previously told POLITICO that China’s economic ties with Latin American countries present a “national security threat” for the U.S. that the administration is actively trying to mitigate. The White House declined to comment. Fred Fleitz, another Trump NSC chief of staff in his first term, noted that the president has “pressed Putin to end the war to normalize Russia’s relationship with the U.S. and Europe,” and wants Russia to rejoin the G8. “It is clear that Trump wants to find a way to end the war in Ukraine and to coexist peacefully with Russia,” said Fleitz, who now serves as the vice chair for American Security at the America First Policy Institute. “But I also believe he correctly sees the growing Russia-China alliance as a far greater threat to U.S. and global security than the Ukraine War and therefore wants to find ways to improve U.S.-Russia relations to weaken or break that alliance.” Others, however, remain skeptical. Craig Singleton, senior director of the China program at Foundation for Defense of Democracies, said the goal to break Russia and China is “appealing in theory, but in practice the partnership between Moscow and Beijing is iron-clad.” “Obviously there is nothing wrong with testing diplomacy and President Trump is a dealmaker. But history probably suggests that this won’t really result in much,” Singleton added. “The likely outcome [with Russia] is limited tactical cooperation with the U.S., not some sort of durable break with Beijing.” And China seeks to keep Russia as an ally and junior partner in its relationship as a counter to Western powers. Chinese Foreign Minister Wang Yi reaffirmed the relationship in a press conference this month, saying, “in a fluid and turbulent world, China-Russia relationship has stood rock-solid against all odds.” Secretary of State Marco Rubio, shortly after his confirmation, hinted at the broader strategy, saying in an interview, that “a situation where the Russians are permanently a junior partner to China, having to do whatever China says they need to do because of their dependence on them” is not a “good outcome” for Russia, the U.S. or Europe. But Rubio, like the Trump administration official given anonymity to discuss ongoing negotiations, both acknowledged that fully severing those ties would be a tough lift. “I don’t know if we’ll ever be successful at peeling them completely off a relationship with the Chinese,” Rubio said in February of last year. Adam Savit, director for China policy at the America First Policy Institute, argued that “Russia matters at the margins, but it won’t be a decisive variable in the U.S.-China competition,” and that the “center of gravity is East Asia.” “Russia gives China strategic depth, a friendly border, energy supply, and a second front in Ukraine to sap Western attention,” he said. “Getting closer to Russia could complicate China’s strategic position, but Moscow is a declining power and solidly the junior partner in that relationship.”

U.S. President Donald Trump may think his war in Iran is a boon for the oil industry — but his way of putting it is causing consternation. “The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,“ Trump wrote in a Truth Social post Wednesday as crude prices rose to $95 per barrel, a 40 percent increase from where they were before the U.S. and Israel attacked Iran nearly two weeks ago. Trump’s post highlights the industry’s complicated relationship with the president — and its messaging conundrum. While oil companies are benefiting financially from the nearly $30-per-barrel run up in crude prices since the war started, executives are also worried that volatile prices are making business decisions difficult, and high prices will generate public backlash. “The idea that the industry profits from war and death is not one a VP of public relations wants to promote,” said Mark Jones, political science fellow at Rice University’s Baker Institute. Trump’s post drew groans from some in the industry. “Oh, boy….” one energy industry strategist responded when shown Trump’s social media post. Trump’s message also feeds into a perception that oil companies are looking to gouge consumers, said a second industry official granted anonymity because he wasn’t authorized to speak publicly. “This highlights the complicated relationship the oil industry has with the president,” the industry official said. “President Trump’s overarching concern is always the price at the pump — and the lower the better. There is also some notion that the oil and gas industry secretly works to raise prices, which is a fundamental misunderstanding of how the industry works on a global and transparent market basis.” Trump’s post also plays into some voters’ cynicism about business in general and the oil industry in particular, said Mark Mizruchi, a University of Michigan professor who focuses on the economic and political behavior of large American corporations. “The interesting thing about Trump’s statement is that he inadvertently stated a belief that a lot of people have — that something like this happens and the oil companies will make a lot of money,” Mizruchi said. “It probably didn’t occur to him that people — including in the industry — weren’t happy about that” statement. The White House has maintained that the price of oil and gasoline — which has jumped 60 cents per gallon since the fighting started — will ultimately come down after the war because new supplies from Iran will come onto the global markets. “Ultimately, once the military objectives of Operation Epic Fury are completed and the Iranian terrorist regime is neutralized, oil and gas prices will drop rapidly again, potentially even lower than before the strikes begin,” White House spokesperson Taylor Rogers said. “As a result, American families will benefit greatly in the long term.” In the meantime, Rogers said, the administration “has and will continue working cooperatively with leaders in the energy industry to stabilize markets.” The war is already causing difficulty for the industry. Oil companies operating solely in the United States will get pure short-term profit from the spike in prices, but large international companies may have to shut down assets they’re operating in the Persian Gulf, white the supply shock afflicting Southeast Asia and Europe could also persuade countries to reduce their reliance on fossil fuels, Jones said. Andrea Woods, a spokesperson for the American Petroleum Institute, said in a statement that the industry is “focused on working with the administration to ensure safe and reliable operations in the region.” “Energy market volatility does not benefit anyone, including producers who rely on certainty and stability for long-term business decisions,” Woods said. The oil industry has had a volatile relationship with Trump since his first administration, one where they benefit from some of his policies — but also suffer under others, like tariffs. And while Trump is one of the industry’s biggest cheerleaders, he has also dragged them into politics in ways industry executives are not always comfortable with. Trump on the campaign trail made a point of asking oil industry executives for a billion dollars, but the industry overall contributed $75 million, according to an analysis of campaign contributions by the environmental communications firm Climate Power — less than Trump’s campaign received from SpaceX, the firm owned by billionaire Elon Musk. Harold Hamm, the chair and founder of oil company Continental Resources and an informal energy adviser to Trump in his first and second terms, initially backed Florida Governor Ron DeSantis in the 2024 presidential campaign. Trump also tried to push oil company executives into publicly supporting his administration’s military action against Venezuela and promising to quickly invest in drilling for oil in the country. That move met pushback from some executives who didn’t share Trump’s optimism on how easy it would be to revive Venezuela’s oil fields. Democrats and environmental groups wasted little time to use Trump’s post to slam the administration and the oil industry. “I’ve been saying forever that Donald Trump’s energy policy is to prioritize the interest of energy producers (high prices) over consumers (low prices),” Rep. Sean Casten (D-Ill.) said in an X post. “It appears he agrees with me.” “Instability makes oil prices soar,” Lorne Stockman, international research director at Oil Change International said in a press release response to the post. “As geopolitical tensions rise, Trump’s fossil fuel billionaire donors reap windfall profits while people are being killed and working people around the world face higher energy and food costs.” In Trump’s post, the president isn’t talking about families grappling with their bills, said Jesse Lee, a senior adviser at Climate Power. “Trump is talking about the people he cares about most — the oil and gas billionaires who spent millions of dollars to get him elected,” Lee said in an email. “Trump will always put his billionaire buddies first, and working families will always be left to pay the price.” Rising oil prices are expected to be a political liability for Republicans heading into midterm elections later this year. Even besides higher prices at the local gas station, the effect of increased crude costs will hit voter pocketbooks in a myriad of ways. Companies across a range of industries have started to implement energy surcharges to absorb higher fuel costs, Raymond James analyst Pavel Molchanov said in note to clients. “UPS and Maersk (shipping), Ecolab (chemicals), and Cathay Pacific (aviation) are among the firms unveiling surcharges this week,” Molchanov said in the note. “We expect more such announcements until oil prices cool meaningfully from four-year highs.”

President Donald Trump’s military campaign against Iran has Washington’s Asian allies scrambling to address an energy crisis that could destabilize many of their economies within weeks. And so far their appeals for guidance or assistance from the Trump administration are going unheeded. Asian countries are some of the most exposed to the energy crisis sparked by the Iran war because they rely heavily on oil and liquefied natural gas that passes through the Strait of Hormuz, which has effectively ground to a halt since the first U.S.-Israeli strikes on Iran two weeks ago. In that time, Japan, Thailand, Vietnam, South Korea and others have struggled to decode Trump’s yo-yoing statements about the goals of the operation and when it will end, according to three Asian officials and one former U.S. official who were granted anonymity to discuss the tensions. “We’re not receiving any communication from the Trump administration,” said one of the people, a Washington-based Asia diplomat. Asked what the Trump administration could do, the person said, “Ideally, just end the conflict.” Another one of the officials from an Asian country pointed out that there are actions short of that that the U.S. could take to ease the pressure on energy markets, such as enlisting other countries to participate in its effort to guarantee insurance for tankers transiting the Strait of Hormuz. The Trump administration has given no indication that it plans to take such actions. The International Energy Agency said Wednesday its member countries would release 400 million barrels of oil from their emergency stocks in the largest such reserves distribution in its history, but it’s unclear how much this will ease the pressure on Asian countries. Many Asian economies lack large domestic reserves and are thus particularly exposed to price spikes and supply disruptions. “Our oil reserves are enough for about one month of domestic consumption,” the Washington-based Asian diplomat said. President Donald Trump said Wednesday that Washington’s attacks on Iran’s navy should assuage concerns about the safety of ships transiting the Strait, but that does not to appear to have done much to ease jitters. The second Asian official said some of Trump’s comments suggesting he is digging in for a long conflict are ratcheting up concern. His country’s alarm level will be dictated, “by how long this goes on,” the official said. Trump said Wednesday that the U.S. has hit a significant number of Iranian military targets and suggested the war could be over quickly. He has also said it could take four to six weeks, but has also called for Iran’s “unconditional surrender,” which could take much longer. Countries across the Indo-Pacific are taking measures to limit the impact of a looming cut in oil and gas from the Persian Gulf if supplies don’t resume in the next two weeks. The Philippines and Vietnam have revived Covid-era work-from-home directives to ease consumer demand for gasoline. India has imposed a 20 percent cut in LNG supply to the country’s industrial sector, New Delhi announced Wednesday. The Japanese government announced Wednesday it will release some of its strategic petroleum reserves to compensate for a shortfall in imports. The U.S. could see long term effects of leaving its Asian allies to fend on their own. “Foreign embassies need and expect information that explains what the U.S. is doing, reassurance that this is a short-term problem and what our plan is to help,” said Scot Marciel, former principal deputy assistant secretary for the State Department’s Bureau of East Asian and Pacific Affairs during the Obama administration. “Not doing that just adds to a pretty strong sense in the region that the administration is not really making a lot of effort to be a good partner.” The White House said allies will ultimately benefit from what is a temporary disruption. “President Trump has been clear that these are short-term disruptions,” White House spokesperson Taylor Rogers said. “President Trump is in close contact with our partners around the world, and the terrorist Iranian regime’s attacks on its neighbors prove how imperative it was that President Trump eliminate this threat to our country and our allies.” The Trump administration has limited options to cushion the impact of the supply interruption on the economies of allies and partners in the Indo-Pacific. An oil commodity trader at a major U.S. investment bank said America’s LNG production is already running at maximum and there is no emergency flex capacity that American producers can bring to bear to supply Asia. “There is no short term, immediate thing that the U.S. can do for Asia — there is no pipeline or trucking that can get more gas from here to there,” said the trader, who was granted anonymity because they were not authorized to speak publicly about the issue. Last week the Trump administration said it would temporarily allow India to accept Russian oil. India, a larger refiner, also supplies petroleum products like gasoline and diesel fuel to other Asian countries. Asian countries are competing with each other as they try to pivot to other sources of oil and gas. The jockeying is hitting the wall of recent restrictions on output by regional refineries due to the lack of crude oil coming from the Persian Gulf. China could potentially wrangle a short-term easing in supply constraints in Asia if it taps its close ties with Tehran to ensure that China-bound cargoes pass through the Strait of Hormuz unmolested by Iranian forces. Those shipments may already be happening, according to CNBC reporting Tuesday. Trump has spent the past week attempting to cool nerves in the global energy market, as the price of oil has spiked by more than 29 percent since the U.S. and Israel first launched attacks on Iran. “I think you’re going to see great safety. We have decimated that country. They’re paying a big price now,” Trump said Wednesday, responding to a question about whether oil companies should transit the Strait. But Iran has continued to hit ships in the vital waterway. On Wednesday “unknown projectiles” hit and sparked a fire on a Thai cargo vessel in the Strait while two other ships were hit in the nearby Persian Gulf, the New York Times reported. The leaders of G7 countries — which includes Japan — agreed in a call on Wednesday to prepare for future freedom of navigation operations though such efforts are not possible now “as it remains an active theater of war,” according to a French account of the discussion. While the U.S. has been concerned that Iran has begun to lay mines in the Strait of Hormuz, Trump said Wednesday the U.S. believes Iran hasn’t yet done so. He said the U.S. has hit 28 mine-laying ships. Japan’s Prime Minister Sanae Takaichi will have the chance to raise her concerns and others on the continent when she arrives in Washington next week for a summit with Trump that was planned before the war broke out but has taken on new meaning amid the turmoil. “The president made a decision on Iran without consulting allies, and they’re bearing the brunt of it. So the president obviously needs to appreciate the cost that Japan will bear” when he meets with Takaichi next week, Rahm Emanuel, former U.S. ambassador to Japan, said.

American allies are watching in disbelief as the Pentagon reroutes weapon shipments to aid the Iran war, angry and scared that arms the U.S. demanded they buy will never reach them. European nations that have struggled to rebuild arsenals after sending weapons to Ukraine fear they won’t be able to ward off a Russian attack. Asian allies, startled by America’s rate of fire, question whether it could embolden China and North Korea. And even in the Middle East, countries aren’t clear if they will get air defenses from the U.S. for future priorities. Nearly a dozen officials in allied nations in Asia and Europe say they can’t win. The Trump administration has put them under extreme political pressure to raise defense budgets and buy American weapons — from air defense interceptors to guided bombs — only to quickly burn through those munitions in a war of its own. “It shouldn’t be a secret to anyone that the munitions that have been and will be fired are the ones that everybody needs to acquire in large numbers,” said one northern European official. Weapons production is a complex process that takes years of planning and runs through a supply chain riddled with bottlenecks. Trump’s reassurances that the U.S. has a “virtually unlimited supply” of munitions to fight Iran has done little to soothe allies’ fears. “It is very frustrating, the words are not matching the deeds,” said an Eastern European official, who like others interviewed, was granted anonymity to speak candidly. “It is pretty clear to everyone that the U.S. will put their own, Taiwan’s, Israel’s, and hemisphere priorities before Europe.” The joint U.S.-Israel war, officials warn, could accelerate the distancing between America and its allies when it comes to defense. The European Union already has approved rules to favor its own arms-makers over American contractors — risking tens, if not hundreds of billions in future U.S. sales. Even major companies, such as the German drone-maker Helsing are touting “European sovereignty.” Poland, a longtime American ally, has bought tanks and artillery from South Korea instead of U.S. contractors such as General Dynamics. It’s been a wake-up call for officials in Asia and Europe who once took Pentagon arms sales for granted. “The Europeans still live in a dream world in which the U.S. is a gigantic Walmart, where you buy the stuff and you get it immediately, and that is simply not true,” said Camille Grand, a former top NATO official who now heads the Brussels-based Aerospace, Security and Defence Industries Association of Europe. Allies in the Pacific — where China has built the world’s largest Navy and now has missiles that can attack American troops on Guam — are worried that the Pentagon will run out of ammunition in Iran and won’t have any left to deter a war in Asia. “It’s natural that the longer the conflict, the more urgent the supply of munitions and its inevitable for the U.S. to mobilize its foreign assets to maintain the operation,” said a Washington-based Asian diplomat, who warned it would affect “readiness” in the region. The fears of depleted weapons stockpiles extend to the U.S., where some Pentagon officials are warning about the state of the military’s munitions stockpiles, according to a congressional aide and two other people familiar with the dynamic. Defense Department officials warned Congress this week that the U.S. military was expending “an enormous amount” of munitions in the conflict, according to two of the people familiar with the conversations. The congressional aide briefed by the Pentagon said the U.S. was using precision strike missiles and cutting-edge interceptors in “scary high” numbers despite the Iranian military’s relative weakness. The weapons also include Tomahawk land-attack missiles, Patriot PAC-3 and ship-launched air defenses fired by the Navy. “The idea of doing a larger campaign with Iran was not on anyone’s mathematical bingo card as we were looking at munitions implications,” said a former defense official. “I struggle to see a way that layering on the Iran element makes the math problem get any better.” The Pentagon referred questions to the White House. Anna Kelly, a White House spokesperson, said Iran’s retaliatory ballistic missile attacks had fallen by 90 percent because of U.S. strikes. “President Trump is in close contact with our partners in Europe and the Middle East, and the terrorist Iranian regime’s attacks on its neighbors prove how imperative it was that President Trump eliminate this threat to our country and our allies,” she said. But some defense hawks in Congress are worried. Sen. Mitch McConnell (R-Ky.) warned Wednesday on the Senate floor that the military is “not prepared” to deter aggression from both Russia and China at once due to the munitions shortfall. McConnell did not reply to a request for comment. Trump said in a social media post that he met with defense executives on Friday, including Boeing, Northrop Grumman, RTX, and Lockheed, who agreed to quadruple their production of “Exquisite Class” weapons. He did not explain which systems that entailed or how the U.S. planned to rapidly build factories, hire workers and increase weapons production. Some allies worried about weapons are hoping that’s more than an empty promise. “It seems that U.S. defense primes are still challenged to produce at the speed of demand,” said Giedrimas Jeglinskas, a Lithuanian member of Parliament who is also a former deputy Defense minister. “We welcome any effort by the administration to incentivize defense companies to get into war mode of production.” Others cautioned that the defense industrial base can’t be turned on with a switch to start mass producing the sophisticated missiles and air defenses that the U.S. and its allies desperately need. “There’s always this idea that there is a world in which we just have to go World War II,” said Grand, the former NATO official. “But [in] World War II, producing Sherman tanks was pretty close to producing tractor engines. Producing a Patriot is not pretty close to producing a Tesla.” Paul McLeary contributed to this report.

A week after it began its strikes on Iran, the Trump administration’s efforts to stem the rise in energy prices have yet to turn the tide — and analysts warn the worst of the price shocks may still be to come. The U.S. benchmark oil price eclipsed $90 a barrel on Friday for the first time since 2023, up more than $20 since the war began Saturday and the market’s highest one-week jump in history. The price increase has already started to appear for American consumers, with prices at the gas pump up 32 cents a gallon from a week ago. The unyielding price increases — which analysts attributed to the continued disruption in the Strait of Hormuz, through which 20 percent of the world’s crude passes each day — comes as President Donald Trump is under rising pressure to contain the economic impact of the war on Americans, eight months ahead of the midterms, where affordability issues are top of mind. “Crude WILL go to $200 [a barrel], en route higher, unless traffic through the Strait resumes,” said Rory Johnston, an oil analyst who writes the newsletter Commodity Context, in a post on X. “Not clickbait, but rather brutal physics and necessary economic incentives.” The White House has announced several measures aimed at calming the oil markets this week, including temporarily easing sanctions on India’s purchase of Russian oil and offering naval escorts and political risk insurance to oil and gas tankers traversing the Strait of Hormuz. None of those measures has succeeded, however, as traders boost prices on news of disruptions to supply. Iran has succeeded in damaging several oil tankers, Iraq and Kuwait have already throttled oil production because their crude tankers can no longer get to market, and China has warned it could stop exporting fuel amid supply concerns. The longer that ships avoid the Strait of Hormuz, Gulf countries will start to run out of storage capacity and be forced to shut in their production, said Claudio Galimberti, chief economist at research firm Rystad Energy. “If the Strait of Hormuz remains closed for, let’s say, three weeks, then you will have shut in 15 million barrels a day of production in the Middle East,” Galimberti said at a Rystad conference in Washington on Thursday. “That takes us from a position of comfortable oversupply as of [last] Friday to one of incredible deficit, the size of which we’ve never seen.” Galimberti noted that oil may be slow to flow even if shipping traffic resumes, given the difficult and expensive processes required to restart production. “If it’s shut for weeks or months, then it’s going to take weeks and probably months to bring it back to the same level,” he said. Still, the administration has said it sees little cause for long-term alarm. Energy Secretary Chris Wright said Friday morning that Americans should expect gas prices to come down again soon. “It’s weeks, I would say, in the worst case,” Wright told Fox News. “It’s weeks, not months.” Wright acknowledged that prices are “more than we’d like them to be,” but noted they remain far lower than the record levels hit after Russia’s invasion of Ukraine during the Biden administration, when global crude supplies were much tighter. White House press secretary Karoline Leavitt said in a statement that record U.S. oil production, new supplies from Venezuela and efforts to reopen the Strait of Hormuz will keep a lid on prices. “President Trump’s entire energy team, from the White House to the National Energy Dominance Council to Secretaries Wright and Bessent, have a game plan to keep oil prices stable throughout Operation Epic Fury,” Leavitt said. Market analysts are painting a much more dire picture of the situation, however. Six days into the conflict, oil and gas tankers remain largely unwilling to transit the strait, cutting off a key supply route between major oil producers in the Gulf and their customers in Asia and beyond. Even with the price increases this week, markets may not be pricing in the true impact of an extended closure of the strait, said Andon Pavlov, director of oil and tanker research at commodity tracking firm Kpler. “There is a widespread expectation across the market that the alternative of not opening the Strait of Hormuz is just so apocalyptically bad that eventually something will happen,” he said in a Thursday webinar. “Is it going to happen? Every day makes it less and less likely.” Even if the Trump administration can get the price of oil under control, that does not guarantee that the price of gasoline comes down with it, said Catherine Wolfram, a former deputy assistant secretary for climate and energy economics at the Treasury Department. “Economists talk about what’s called rockets and feathers — that gas prices go up like rockets when oil prices go up, but then if oil prices go back down … they go back down like feathers,” said Wolfram, who is now a professor of energy economics at the MIT Sloan School of Management. “Especially if you’re coming into the period when [gas prices] tend to rise because of summer driving, they might just stay high, even if oil prices go back down,” she said. The Development Finance Corporation announced new details Friday on the insurance program aimed at getting tankers moving again, which it said would cover losses up to $20 billion. “We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world,” DFC CEO Ben Black said in a statement. Ben Cahill, an oil analyst and nonresident fellow at Arab Gulf States Institute, said the insurance backstop does not alleviate the fear of being attacked by Iranians, who are “obviously desperate and backed into a corner.” “The measures taken could alleviate some of the risks and maybe drive down some of the costs associated with shipping insurance, but the fundamental problem is still there,” he said. In order to get shipping moving again, “you need a fundamental change in the trajectory of the conflict,” Cahill added. Wright acknowledged in an interview with ABC News on Thursday night that shipping companies have not been willing to transit the strait even with U.S.-backed insurance. “Right now, the biggest issue is just physical security,” he said. “You don’t want to run a large tanker ship through the Strait of Hormuz today, but that’ll change in the not too distant future.” Wright said the U.S. military would begin providing escorts to oil tankers “as quickly as we can,” but its immediate focus was on suppressing Iranian attacks. “First we’ve got to get their ability to cause trouble way down, and then as soon as it’s reasonable to do it, we’ll escort ships through the straits and get the energy moving again,” he said.