Trump’s war on Iran , which began on February 28, 2026 with Operation Epic Fury, has already caused significant disruptions in global energy markets. Fuel prices skyrocketed immediately after the US strikes, raising questions about the energy costs that American consumers will face. This escalation comes at a time when the US is already facing increased energy needs due to the rapid expansion of data centers and the digital economy.
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The escalation of the conflict stemmed from failed nuclear negotiations and the increased US under President Donald Trump. Indirect talks in Geneva on February 26, 2026 ended without an agreement, after a 10-day set by Trump on February 20 to secure a nuclear deal. Preparatory events included Trump on Truth Social of a "massive fleet" heading towards Iran, with the deployment of warships, tankers, and submarines by February 19.
International crude oil prices rose 8% to around $84 a barrel on Tuesday, the highest level since July 2024. That led to a 10-cent to an average of $3.11 a gallon in the U.S.The cost of liquefied natural gas (LNG) rose 45% in Asia and 30% in Europe. These increases reflect market uncertainty and fears of long-term disruptions to energy supplies from the Middle East.
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Since the conflict began, all eyes have been on the Strait of Hormuz, which borders Iran , the United Arab Emirates and Oman . The strait normally carries a fifth of the world’s oil and LNG trade . Shipping was disrupted this week as Iran’s Revolutionary Guard reportedly threatened to shoot ships and shipping insurers changed or cancelled policies. The strait is one of the world’s most critical energy corridors, just 34km wide at its narrowest point.
The Trump administration has announced it will provide naval escort and risk insurance for ships transiting the strait. The deployment of the second aircraft carrier USS Gerald R. Ford underscores the seriousness of the situation and the US determination to keep energy corridors open.
Operation Epic Fury has achieved significant goals, including the death of Supreme Leader Ayatollah Ali Khamenei , the sinking of at least 10 Iranian warships , and the destruction of over 1,000 targets . The initial four-week campaign is expected to be extended. Casualties include six U.S. service members , while Iran 's top leadership has been virtually eliminated. The Iranian counterattack hit a British base in Cyprus and prompted DHS to raise the alarm about possible lone wolf attacks.
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Impact on American Energy Production
Because the US already produces such large quantities of oil and gas, it is more protected than other countries that are more dependent on Iran ’s fossil fuels . However, a prolonged military engagement has the potential to change the outlook for fossil fuel production in the US – already the world’s largest oil and gas producer with output exceeding 13 million barrels per day by 2025. The Permian Basin is expected to increase its production further, while LNG exports to Europe and Asia continue to expand.
