US gains economic edge as Iran war strains global energy markets

 The conflict with Iran is reshaping the global economy in ways that appear to favor the United States, even as higher fuel costs weigh on consumers, news columnist Greg Ip reported in The Wall Street Journal.

While gasoline prices have climbed, the U.S. economy has remained relatively resilient. In contrast, economies abroad, particularly in Europe, are facing rising inflation risks, higher interest rates and slowing growth as energy costs surge. Economists say the divergence reflects structural differences: the U.S. benefits from energy exports, while many allies rely heavily on imported oil and liquefied natural gas. 

The shift underscores a broader change in how the U.S. approaches global energy security under President Donald Trump. Previous administrations framed the free flow of oil as a shared international priority. Trump, by contrast, has emphasized U.S. self-sufficiency, noting that the country imports little oil through the Strait of Hormuz and encouraging others to rely more on American supplies.

That stance reflects the transformation of the U.S. into a major energy exporter, driven by the shale boom and expanded LNG infrastructure. Energy exports now contribute significantly to economic growth and global influence, in some cases surpassing traditional exports like agricultural goods.

The administration has elevated “energy dominance” as a central strategic goal, tying domestic production to geopolitical leverage. Recent actions, including moves affecting oil supplies in Venezuela, illustrate how energy resources are increasingly being used as a tool of foreign policy.

At the same time, the war has exposed vulnerabilities among U.S. allies. Europe, which once depended heavily on Russian gas, has shifted toward U.S. LNG but now faces the risk of overreliance on another supplier. Some policymakers are questioning whether this creates new geopolitical dependencies.

Still, analysts caution that America’s advantage may have limits. U.S. energy production is relatively costly, and private producers are unlikely to restrict supply in ways that would maximize geopolitical leverage. Moreover, if trading partners perceive U.S. energy exports as a political tool, they may seek alternative sources over time.

The longer-term outcome will depend on how the conflict evolves. A resolution could restore stability to global energy flows, while a prolonged disruption may deepen the current imbalance, reinforcing the United States’ position as a key supplier in a strained global market, according to the report.

https://www.msn.com/en-us/money/markets/us-gains-economic-edge-as-iran-war-strains-global-energy-markets/ar-AA20cfxq