The U.S. war on Iran, launched on Feb. 28, 2026, by President Donald Trump, is the first geoeconomic war of this century: A war whose overarching objective is exclusive American control over access to Iran’s huge oil and gas resources.
According to the U.S. Energy Information Administration, Iran has crude oil reserves of about 209 billion barrels (the third-largest after Venezuela and Saudi Arabia) and natural gas reserves of about 1,200 trillion cubic feet (the second largest after Russia). Washington is unlikely to succeed in its attempt to impose control over access to Persian energy resources.
Recommended Stories
A severely battered Iran will manage to retain control of its energy patrimony and emerge with its sovereignty intact.
TRUMP BRUSHES OFF IRAN SUSPENDING PEACE TALKS: ‘WE’VE BEEN TALKING TOO MUCH’
Trump asserts a right of exclusive U.S. control over Iran’s energy resources on the basis of primacy: America is the world’s largest military and economic power. From Washington’s perspective, Tehran’s decisions with respect to the use of its energy resources could threaten American primacy and, therefore, must be subject to ultimate U.S. control. Just as the U.S. claim to hegemony over the Americas is enshrined in the Monroe Doctrine, the U.S. claim to hegemony over the Persian Gulf is articulated in the Carter Doctrine.
In January 1980, President Jimmy Carter declared: “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States, and such an assault will be repelled by any means necessary, including military force.” Absent unconditional surrender, Trump has threatened to destroy Iran’s economy through the use of America’s overwhelming military and economic power.
The harsh reality is that Tehran’s threshold of pain is extraordinarily high. Although Iran has been subject to onerous American economic sanctions virtually continuously since the 1979 Revolution, Tehran has not capitulated. Indeed, from the early days of the revolution, Iran has demonstrated the ability to survive the cratering of its oil production from a peak of 6 million barrels per day to 0.4 million barrels per day. According to the International Monetary Fund, as of year-end 2025, Iran’s economy was a puny $300 billion, the annual average inflation rate was 69%, and the unemployment rate was 9% in a population of 88 million. So, what remains is the physical destruction via punitive aerial bombardment of a largely dilapidated industrial infrastructure that props up the economy.
Iran insists on preserving its exclusive right to control access to the country’s oil and gas resources on the basis of national sovereignty. Accordingly, Tehran intends to leverage its geographic advantage of dominating the entire northern shore of the Persian Gulf to deny access to the crucial maritime chokepoint of the Strait of Hormuz to any entity whose interests are inimical to Iran’s vital national interests. Per the EIA’s report on maritime chokepoints, about 21 million barrels per day of oil (representing about 25% of global maritime oil trade) transited through the Strait of Hormuz in 2025. The figure for liquified natural gas was 20%.
By closing the Strait of Hormuz, Tehran is betting that it will be able to inflict sufficient economic pain to induce Washington to terminate the U.S. war on Iran.
The IMF has attempted to estimate the economic impact of the U.S.-Iran War in its April 2026 World Economic Outlook. The driver is the supply-side “shock” of the loss of a significant portion of Persian Gulf oil and gas, which is transmitted via the very high price of oil. In the IMF “severe” scenario, the average price of crude oil is expected to be about $110 per barrel in 2026 and $125 per barrel in 2027. The average price of crude oil was $69 per barrel in 2025.
In the “severe” scenario, global economic growth is expected to be 2% in 2026 and 2.2% in 2027, compared to 3.4% in 2025. Global inflation is projected to be 5.8% in 2026 and 6.1% in 2027, compared to 4.1% in 2025. Likewise, U.S. economic growth would be anemic — about 1.5% in 2026 and 1.4% in 2027. The U.S. economic growth rate was 2.1% in 2025. Also, the annual U.S. inflation rate would jump to about 4.2% in 2026 and 4.5% in 2027. By contrast, the U.S. inflation rate in 2025 was 2.7%.
The prospect of “stagflation” (economic stagnation and inflation) is the geoeconomic threat that Iran is brandishing with its closure of the Strait of Hormuz.
TRUMP SEEKS TO CALM ISRAEL-HEZBOLLAH FIGHTING IN LEBANON
Washington must decide whether a war against Iran to assert American hegemony over the Persian Gulf is worth the economic pain of stagflation. As Trump’s 2025 National Security Strategy of the United States of America acknowledges, American energy security is no longer dependent upon U.S. control over access to Persian Gulf oil and gas resources.
There may be a silver lining with respect to allowing the Carter Doctrine to lapse, as it would enable the U.S. to refocus on the defense of the homeland and the rest of the Americas.
Samir Tata is the founder and president of International Political Risk Analytics, an advisory firm based in Reston, Virginia, and author of the book Reflections on Grand Strategy: The Great Powers in the Twenty-first Century.
