Every oil crisis in the modern era has produced a counter-reaction larger than itself. The Arab embargo of 1973 did not just empty American gas stations. It built the Strategic Petroleum Reserve, the first federal fuel-economy standards, a national 55 mph speed limit, and a Sunday gasoline ban.
It also empowered a generation of Japanese imports that permanently displaced Detroit’s grip on the American car market. Toyota and Honda walked into an opening that domestic automakers, addicted to V-8 engines and suburban sprawl, had no product to defend.
The 1979 revolution in Iran doubled the price of crude a second time. Jimmy Carter put solar panels on the White House roof and signed the first federal renewable tax credits.
Ronald Reagan tore the panels down in 1986 and let the credits lapse, but the underlying technologies survived in German, Danish, and Japanese laboratories. They grew into the foundation of today’s clean-energy industries.
Each shock pushed the world one notch further from petroleum dependence. Drivers who switched to compact cars did not switch back. Utilities that diversified away from oil-fired generation did not return.
The behavioral pattern is fifty years old and consistent, showing price shocks reshape consumer choice, industrial investment, and government policy in ways that outlast the shock itself. A third shock is now underway, larger than the first two combined, according to the International Energy Agency.
In February 2026, U.S. and Israeli forces struck Iranian nuclear and military sites, ending weeks of failed negotiations. Tehran retaliated by mining the Strait of Hormuz, the 50-kilometer waterway through which roughly 20% of the world’s oil moves each day.
Tankers were hit. War-risk insurance premiums for the strait climbed from 0.125% of vessel value to as much as 0.4%, adding a quarter-million dollars per voyage for the largest ships.
Brent crude pushed past $100 a barrel and has not come back down. Peace talks in Pakistan collapsed in April. The U.S. Navy declared a blockade of Iranian ports on April 12. The strait remains effectively closed.
The IEA’s assessment has been blunt, stating that governments worldwide will lose trust in oil as a reliable security input. Demand will slacken. Investment will redirect, and such damage to the petroleum order may not be recoverable.
For Donald Trump, the timing is catastrophic. The convicted felon and former president returned to office in January 2025 with an energy agenda built around oil and gas dominance, and the dismantling of his predecessor’s clean-energy framework.
Trump withdrew the United States from the Paris Agreement. He paused offshore wind permitting and froze Inflation Reduction Act disbursements. On July 4, 2025, he signed the socially destructive One Big Beautiful Bill Act, phasing out the wind and solar tax credits that had powered a domestic clean-energy boom and ending the $7,500 federal EV consumer credit.
Princeton’s REPEAT Project estimates that legislation will erase $500 billion in clean-energy capital investment over a decade and up to 140 gigawatts of planned solar and 160 gigawatts of planned wind.
The Treasury Department under Trump has issued guidance restricting renewable tax-credit eligibility. The Interior Department has imposed a project-density rule disqualifying many wind and solar projects from federal-land permits. The Energy Department has reportedly added “energy transition,” “climate change,” and “decarbonization” to a list of words to avoid in agency communications.
The Trump administration paid French firm TotalEnergies $982 million to cancel offshore wind projects in New York and North Carolina. It withheld more than $400 million in heating and cooling assistance to households as energy prices climbed. The Rhodium Group projects clean energy’s share of the U.S. grid will shrink between 57% and 62% over the next five to ten years, compared with the trajectory under prior law.
The technological landscape that meets this third shock is unrecognizable from the one that arrived with the 1973 embargo. Solar modules cost roughly $100 per watt in the early 1970s. They cost under a dollar per watt today.
The levelized cost of utility-scale solar electricity in the United States ranged between $38 and $78 per megawatt-hour in 2025, an 84% drop since 2009, according to Lazard’s annual analysis. Onshore wind is in the same competitive band. Solar is now growing faster than coal as a global generation source.
Transportation is moving faster still. Roughly 20.7 million electric vehicles were sold worldwide in 2025, more than a quarter of all new light-duty vehicles. China bought 11 million EVs in 2024 and remained dominant in 2025. BYD overtaking Tesla as the world’s largest EV maker by selling 2.26 million battery-electric vehicles and 4.6 million new-energy vehicles. The Shenzhen company exported more than a million cars last year and operates in over 100 countries.
In March 2026, BYD unveiled a battery system advertised as charging from 10% to 97% in nine minutes. China spent an estimated $230.9 billion in government EV subsidies between 2009 and 2023, building domestic supply chains for lithium, cobalt, and battery cells, and producing affordable models priced for working-class buyers.
The United States is not in the race. Battery-electric vehicles accounted for 7.4% of new U.S. vehicle sales in 2025, according to S&P Global Mobility, down from 8% in 2024. After the federal EV tax credit expired on September 30, 2025, shares collapsed to 5.7% in the fourth quarter and stood at 6.5% in February 2026, per Edmunds. Cox Automotive expects roughly 8% for 2026.
The pattern from 1973 and 1979 is repeating with sharper teeth today. Importing nations are looking at a fuel whose price can be set by a chokepoint patrolled by an adversary, and they are seeking alternatives that are mature, cheap, domestically buildable, and beyond the reach of any cartel or strait.
These governments have a fresh incentive to accelerate exactly the technologies the White House is dismantling at home. Solar arrays cannot be embargoed. Wind farms cannot be blockaded. Trump’s bet was that American oil and gas would remain the floor of the global energy system and that clean energy was a Biden-era subsidy regime to be torn out at the root. The Hormuz crisis has inverted that bet.
A full transition to clean energy will not be instant. Refineries, petrochemical plants, and combustion fleets do not vanish on a politician’s timeline. But the shockwaves from Trump’s vanity war will compound for decades. The country that fired the opening salvo will enter the next era with its clean-energy industry hobbled, its EV market shrinking, and its competitors a continent ahead.
