Oil futures surged after the war with Iran began in late February 2026. Brent crude jumped 10-13% in price, to about $80-82 per barrel in the first days of the conflict and later climbed toward $90-$100, briefly approaching $120 during peak fears that fighting could disrupt shipments through the Strait of Hormuz. Ultimately, delivering a potential $63 billion windfall to U.S. oil producers in the opening days. The conflict also boosted military spending, channeling billions toward U.S. defense contractors including Lockheed Martin, RTX Corporation, and Northrop Grumman, as new orders for missile defense systems, aircraft, and munitions pile up.

While maximally the U.S. may have hoped to quickly establish a puppet state in Iran with the decapitation of the Ayatollah, it has demonstrated it’s hesitancy to fully commit to the conflict and reluctance to engage in massive destruction of the Iranian state’s oil industry which would completely destabilize the country economically, leading to chaos, or even maybe the waking of the aforementioned stone guest...Yet the United States whether or not it accomplishes its maximal aim will continue to reap massive rewards from an extension of the conflict. Commenting on the war Trump recently stated “The United States is the largest Oil Producer in the World… when oil prices go up, we make a lot of money.”

While higher oil prices in fact benefit the U.S., it must cautiously work to control how high they rise. Thus, U.S. strikes on Iranian energy sites have been carefully calibrated rather than aimed at completely destroying Iran’s entire oil industry. While some facilities linked to military logistics or shipping have reportedly been targeted, core export infrastructure, such as terminals and loading facilities that handle most Iranian crude, have so far largely remained operational, and tankers have continued leaving Iranian ports. The main reason appears to be concern over global energy markets. Destroying Iran’s infrastructure could trigger a major supply shock and drive prices sharply higher. As the measured nature of sanctions on Russian oil show, U.S. imperialism is keenly aware of the risk that out of control energy prices would have on the economy as a whole. While thousands of proletarians are massacring the architects of the war, the capitalist class on both sides sit back, openly collaborating together as they coldly calculate how much more blood of their respective proletarians’ blood must be spilt to keep profit rates up.

As we stated in our TICP 434 after the emergence of the short war between Israel and Iran last year: “The conflict between Israel and Iran last June triggered an initial surge in oil prices. However, they quickly returned to previous levels once the ceasefire was announced and the absence of serious supply disruptions was confirmed. The propaganda war, the manipulation of information, and all the staged displays, while suffocating, failed to substantially alter market perceptions of supply and demand.…Increased production capacity in the West and increased supply from OPEC+ could offset the closure of the Strait of Hormuz, but this will only be tested when the infernal forces of imperialism push for a protracted military confrontation…The inter-imperialist contradictions within the oil business reflect the tendency toward overproduction, which exacerbates competition, and represent an important component in the general clash of imperialisms for the redistribution of the world. They add to the material conditions leading to world war, which only the proletariat, resuming the class struggle, can stop, transforming it into a revolutionary war that will put an end to capitalism and the rule of the bourgeoisie across the planet.”

Today we watch one year later as this very situation plays out, and the cynical forces of global imperialism constantly test and probe the situation with each drone strike and bombing run to evaluate the response of stock markets and oil futures to deliver for the dominant capital the most preferred price point.

Lenin argued in Imperialism: The Highest Stage of Capitalism, that monopolies controlling raw materials gain decisive power over the wider economy because industries that dominate key resources can dictate conditions to downstream producers. Oil remains the most important commodity in the global economy, supplying roughly one-third of the world’s primary energy consumption and underpinning transportation, manufacturing, agriculture, and global trade. Because production costs in major fields can be as low as $3–$10 per barrel while market prices often range between $60–$100, control over oil production and distribution can generate enormous monopoly rents, allowing dominant energy firms and states to exert powerful influence over global prices, supply chains, and economic activity.

As we noted in our 2013 study Oil, Monopolies and Imperialism “Henry Kissinger warned in 2005, competition for access to energy can become “a matter of life and death” for nations.” This life and death battle by the dominant imperialist powers for control of “black gold” has played out in successive phases since the birth of the industry. Before World War II, the global oil industry was shaped by the rise of powerful monopolies competing for control of markets, colonial territories, and new oil fields across regions such as Venezuela, Mexico, Persia, and Indonesia. After the war, the focus of global oil politics shifted to the Middle East, where vast reserves and cheap production drew the intervention of Western powers and international oil companies, which used their economic and military influence to dominate production and capture the wealth of the oil-producing countries. Oil prices were relatively stable from 1900 until the early 1970s, but after the 1973 OPEC oil crisis they became far more volatile. Since then, the United States has established a broad military presence across the Middle East,, while repeatedly intervening to ensure the financial subordination of the regional oil producing states and their sale of oil, “at the right price”.

Yet over the past decade the global oil market has been fundamentally transformed with the rise of U.S. shale production. With output increasing from about 5 million barrels per day in 2008 to more than 13 million by the early 2020s, the United States has become the world’s largest oil producer and exporter. This shift demonstrated the alignment between the capitalist state’s long-term military strategy and the financial interests of it’s industrial monopolies, as both Democratic and Republican administrations promoted domestic energy development under the banner of “energy independence,” supporting research, tax incentives, and regulatory frameworks partly funded through the U.S. Department of Energy that advanced technologies such as horizontal drilling and hydraulic fracturing. The rapid growth of U.S. production added millions of barrels of new supply to global markets and played a major role in creating the 2014–2016 oil glut, pushing prices down from over $100 per barrel to around $30, severely impacting oil-dependent economies such as Venezuela, Nigeria, Russia, and Saudi Arabia, where government budgets relied heavily on petroleum revenues and the sharp collapse in oil prices triggered fiscal crises, currency instability, and economic contraction.

The collapse of oil prices during the global glut had particularly devastating consequences for Venezuela, whose economy depended overwhelmingly on petroleum exports, which accounted for about 96% of export revenues. As prices fell and global supply surged, the country lost critical foreign currency and government income, triggering hyperinflation, shortages of basic goods, and mass emigration. The crisis spiraled into one of the deepest economic collapses in modern history, with Venezuela’s GDP shrinking by more than 75% between roughly 2014 and 2020–2021 as falling oil revenues and declining production devastated the economy so deeply it still has not recovered.

After the lifting of the U.S. crude export ban in 2015, U.S. exports began to rapidly flood onto markets while the rival oil exporting imperialisms suffered. In his 2018 address to the United Nations General Assembly, Donald Trump delivered his speech, which had just witnessed the destruction of the Venezuelan economy, and announced the next phase of U.S. imperialism’s global protection racket, stating

“We have unleashed America’s energy potential. The United States is now the largest energy producer anywhere on the face of the Earth. Soon we will be exporting energy all over the world… We are becoming energy dominant. America stands ready to export our abundant, affordable energy. We ask our friends and allies to reject energy policies that harm their interests and threaten their sovereignty.”

The 2017 U.S. Department of Energy report Energy Dominance: The Next Steps argued that expanding domestic drilling, pipelines, and export infrastructure would allow the United States to “use our energy resources as a strategic asset,” a strategy reinforced by policies opening new offshore areas to drilling, accelerating pipeline approvals, and rapidly expanding LNG exports.

Alongside this expansion, Washington increasingly used sanctions against major oil-producing states. Subsequently the U.S. issued renewed sanctions which reduced Iran’s exports from about 2.5 million barrels per day in 2018 to under 500,000 barrels per day by 2020, while sanctions on Venezuela contributed to exports falling from roughly 2 million barrels per day in 2017 to about 600,000–700,000 barrels per day by 2020. By restricting these producers’ ability to access global markets while expanding its own export capacity, the United States was able to increase its share of global oil trade, with U.S. companies growing their market share to roughly 13% of global crude exports.

Yet despite its recent expansion, there are structural limits to U.S. dominance in global energy markets. Forecasts from the U.S. Energy Information Administration have predicted U.S. oil production to peak in the late 2020s, reaching roughly 14 million barrels per day around 2027 before gradually declining to about 11.3 million barrels per day by 2050 as the shale boom fades. However, shale reservoirs differ significantly from conventional fields. Their low-permeability rock means wells decline rapidly, often losing more than half their output within the first year, requiring constant drilling to maintain production. As the most productive “sweet spots” are exhausted and lower-quality rock remains, sustaining output becomes increasingly costly and dependent on high oil prices and continuous investment. If prices fall or drilling slows, production can decline quickly, leading many analysts to believe the rapid growth of U.S. shale may eventually plateau and decline, allowing conventional producers, particularly in the Middle East, to retake their lost share of global oil markets over the next few decades.

Today many U.S. shale operations require oil prices roughly between $50-70 per barrel to remain profitable according to the Federal Reserve Dallas Energy Survey. Likewise, a price above $70 per barrel is needed for companies to start expanding drilling programs, while at $80-90+ there are strong incentives for rapid production growth, and at $90-$120 there is estimated to be maximal growth potential.

Prior to the war in Iran prices sat at around $65 per barrel and as of March 7th they have grown to nearly $120. Before the conflict, many industry analysts expected U.S. shale growth to slow or even decline due to global oversupply, and declining drilling investment with forecasts of oil prices declining to $55 per barrel by 2027.

Thus, the War in Iran conveniently presents the U.S. oil industry with the climbing price it has needed to avoid stagnation and decline. Demonstrating that the war itself is driven by capitals need to maintain its profit rates amid the growing over production crisis, particularly within the oil market.