President Donald Trump’s pivot away from the green energy agenda of former President Joe Biden toward a renewed embrace of oil, natural gas, and coal is strengthening the United States. Energy abundance makes America stronger, both economically and politically.
A tentative de-escalation appears to be taking place with respect to the Iran war. According to the president, negotiations are underway to resolve the conflict. Time will tell whether those negotiations are successful. Regardless, the status of the U.S. as the world’s leading producer of both oil and natural gas gives the Trump administration leverage in its negotiations with Iran.
Unlike the shortages and long lines at gas stations during the 1973 oil embargo, today the U.S. economy is well supplied with both oil and natural gas. Prices for both commodities are substantially lower in the U.S. than they are in countries such as Germany, where policy elites made the economically disastrous decision to abandon carbon-based energy sources in favor of renewable energy.
In Germany, prices for crude oil are up around 60% since the start of 2026. By contrast, the price of the U.S. oil benchmark has increased by about 35%. Admittedly, that price increase is significant, but economists believe that even with this sharp rise, the risk of a recession for the U.S. economy remains low. Because of Trump’s energy policies, America is well-positioned to weather the storm of the Iran war. As for natural gas, the picture is even more grim for Germany and the rest of Europe. Since the beginning of the Iran war, natural gas prices in Germany have soared by nearly 70%. In the U.S., prices have increased by only about 5%. U.S. businesses that rely on natural gas as a fuel source are experiencing slight margin pressure. In Germany, however, companies that depend on natural gas are going bankrupt at an accelerating pace.
What makes the energy crisis in Germany and across the continent even more troubling is that Germany and other European countries possess vast possibly recoverable shale gas reserves. Yet German policymakers chose to go “green,” and now German businesses, and the broader economy, are paying the price for that misguided decision. With energy prices elevated by the Iran war, Germany’s GDP growth is expected to fall to just 0.6%, down from prior projections of around 1% growth. Across Europe, the energy price shock is expected to shave up to 0.5% from pre-war growth rates. In short, both the German and European Union economies are approaching stall speed.
In stark contrast, the Federal Reserve has updated its forecast for 2026 economic growth. Despite spikes in oil and natural gas prices, the U.S. economy is projected to expand at a rate of 2.4%. In real terms, U.S. GDP will increase by more than $600 billion. By comparison, the German economy is expected to grow by roughly $25 billion in 2026.
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Moreover, in the past three weeks alone, Germany has experienced an import price shock of up to $10 billion because of the war. In contrast, because the U.S. is a net exporter of oil and natural gas, the domestic energy sector is expected to generate windfall profits exceeding $90 billion if prices remain elevated for several months. While higher energy prices act as a consumption tax, they also generate profits that are recycled through the economy, supporting increased investment and, over time, higher levels of GDP.
Trump’s energy policies are proving to be a powerful driver of long-term economic growth.
James Rogan is a retired foreign service officer who later worked in law and finance for over 30 years. Now he writes a daily note on markets, economics, politics, and social issues.
