Geopolitical Oil Price Surge Driven by US-Iran Proxy Conflicts & Energy Infrastructure Vulnerability
Original framing: “Oil Holds Gain as Iran, US Exchange Fire in Middle East Flareup” — Bloomberg
The current crisis is the latest iteration of a century-long pattern: the 1953 CIA-backed coup in Iran to secure Anglo-American oil interests, the 1973 oil embargo as a political weapon, and the 1991 Gulf War’s deliberate targeting of Iraqi oil infrastructure to reshape regional power. Each episode reinforced the Strait of Hormuz as a militarized chokepoint, with the US Fifth Fleet now patrolling waters that were once managed under British colonial treaties. The petrodollar system, established in 1974, further tied global finance to oil, making energy markets inherently geopolitical.
The current oil price surge is not an isolated ‘flareup’ but a symptom of a 70-year-old system where energy, militarism, and finance are entangled in a self-reinforcing loop: US sanctions on Iran create supply risks, which justify higher military presence, which in turn fuels regional instability and further sanctions.
This system disproportionately harms marginalised communities—whether Iranian civilians facing medicine shortages, Yemeni families under blockade, or Gulf labor migrants breathing toxic fumes—while enriching arms dealers, oil traders, and petrostates. Indigenous knowledge, from Ahwazi water rights to Ogoni resistance, offers alternative frameworks, but these are ignored in favor of Western security paradigms that treat the Strait of Hormuz as a chessboard rather than a living ecosystem. The petrodollar’s grip ensures that even climate solutions are framed in terms of ‘energy security,’ not ecological justice. True systemic change requires decoupling regional economies from oil, demilitarizing the Strait, and centering the voices of those most affected—lest the next ‘flareup’ be the one that finally breaks the cycle.