Can Iranian Oil Be the Real Deal Sweetener for President Trump? The Geopolitics of Oil in the US-Iran War
As the US-Israel war on Iran enters its fourth week, the strategic calculus behind the conflict is becoming clearer. While the official narrative focuses on Iran’s nuclear ambitions and the threat it poses to Israel and international peace, a closer examination suggests a different, more pragmatic driver: oil. For President Donald Trump, whose worldview has long centred on the primacy of energy resources, the control of Iranian oil may be the real prize, the ultimate sweetener that could make a deal—and the war that preceded it—worth the cost.
The emphasis on oil and its control fits seamlessly into President Trump’s worldview that oil is critical to prosperity and power, and hence the United States must control it. This is not a new obsession. During his first term, Trump withdrew the United States from the Paris Agreement on climate change, freeing the US from any obligations to restrict the use of fossil fuels, including oil. He also withdrew from the Joint Comprehensive Plan of Action (JCPOA), the nuclear deal that had eased sanctions on Iran in return for restricting its uranium enrichment to civilian levels. That withdrawal effectively reintroduced a stranglehold on Iran, a major oil exporter, and its oil revenues. In the Middle East, the Abraham Accords helped build Israel’s ties with several Arab nations, especially the oil-rich UAE, further consolidating a regional bloc aligned with American interests.
Now, in Trump’s second term, the war on Iran has brought the question of Iranian oil to the forefront once again. Notably, while US strikes have hit numerous targets across Iran, oil installations have been conspicuously kept out of the bombing campaign. One Israeli strike on these installations reportedly drew a frown from across the Atlantic, suggesting that Washington is keen to preserve Iranian oil infrastructure as an asset to be controlled, not destroyed. Furthermore, while “boots on the ground” in general does not appear to be on the US agenda, there are indications that such an action is being contemplated for Kharg Island, a tiny speck in the Persian Gulf from which Iranian oil is shipped. This small island, more than any city or military base, may be the strategic heart of the conflict.
To understand the potential for an oil-driven deal, one must consider the trajectory of the war and the motivations of its key players. For both President Trump and Prime Minister Benjamin Netanyahu, there are personal stakes beyond grand strategy. For Trump, the war serves as a powerful distraction from the ongoing Epstein matter and other domestic scandals. For Netanyahu, it helps keep at bay the corruption charges that may await him out of office. There are also issues of legacy for both men, and, of course, domestic politics. In the US, the pro-Israel lobby has always allowed Israel much leverage, and Netanyahu has been particularly adept at using that leverage with Trump.
But beyond these personal and political motivations, the oil calculus is becoming increasingly clear. President Trump has often invoked the Venezuelan parallel in Iran, noting US control of its oil. In Venezuela, the US has sought to leverage its influence to secure access to the country’s vast oil reserves. In Iran, the same logic applies. While earlier statements from the administration spoke of “freeing the Iranians from their theocratic government,” more recent articulations hint at a change from within the Iranian establishment. The stated unhappiness with the choice of a new Supreme Leader—Mojtaba Khamenei, the son of the previous Supreme Leader—is a signal that the US may be open to a leadership that is more amenable to its interests, not necessarily a democratic revolution.
Iran’s new Supreme Leader, Mojtaba Khamenei, has responded with defiance. A statement issued on his behalf vows revenge and warns Gulf states about hosting US bases. It speaks of continuing to leverage the Strait of Hormuz, the key global oil waterway that Iran controls. This leverage is Iran’s primary bargaining chip. The question is whether this leverage can be leveraged, and whether Iranian oil can become the pivot for a ‘deal’ that would be attractive to President Trump.
The historical context is instructive. Western sanctions on Iran, imposed over decades, have effectively driven the nearly $350 billion economy and 93 million-strong society away from the West and towards China. In recent years, China has started sourcing over 10 per cent of its crude imports from Iran. In the context of both Venezuela and Iran, it has been suggested that crimping the Chinese on their oil sources and ensuring that oil trading remains in US dollars were also important motivators for US policy. These issues certainly have merit, but they appear to be collateral benefits. All indications still signal that President Trump wants to do a deal with China and has even planned a state visit to Beijing in April. The primary driver, therefore, remains the oil itself.
Iran going nuclear and developing intercontinental ballistic missiles has been stated as an existential threat not only to Israel but also to international peace and security. This is the official justification for the war. Any deal, therefore, must include Iran accepting acceptable restrictions on its nuclear and other offensive capacities. But oil appears to be the real sweetener. Policy analysts will find the necessary national security imperatives to justify such a deal, no matter if it is essentially being driven by President Trump’s instincts.
There are precedents for this kind of transactional approach. Oil prices have huge domestic ramifications in the United States. The administration recently granted a 30-day sanctions waiver for all countries to buy Russian oil, no matter the unhappiness of Ukraine and the Europeans about this pass for Moscow. This decision was driven by the need to keep global oil prices stable and to avoid a spike that would hurt American consumers. The same logic applies to Iran. A stable, predictable flow of Iranian oil to global markets would benefit the US economy.
A potential deal could take various forms. It might involve the US lifting sanctions on Iranian oil exports in exchange for Iran accepting strict limits on its nuclear program and its regional influence. It might involve a restructuring of the Iranian political system, with Mojtaba Khamenei replaced by a more pliable leadership. It might involve a reorientation of Iranian oil exports away from China and towards markets more aligned with US interests. The possibilities are numerous, but the central element remains the same: oil.
For Iran, the incentives are clear. Its economy is in shambles, its currency has collapsed, and its people are suffering under the weight of sanctions. The ability to export oil freely would provide a massive infusion of revenue and could stabilise the regime. For the US, the benefits are equally clear: control over a major source of global oil, a check on China’s energy security, and a strategic victory in the Middle East.
The war has already caused immense suffering and destabilised the region. But in the transactional world of Donald Trump, the calculus may ultimately come down to one question: can Iranian oil be the real deal sweetener that makes all the destruction worthwhile? The signals from Washington suggest that the answer may be yes. The strikes on oil installations have been avoided, Kharg Island is being circled, and the rhetoric has shifted from regime change to a change from within. The sweetener is on the table. The only question is whether Iran is willing to take it.
Questions and Answers
Q1: What is the “real deal sweetener” that the article suggests may be driving President Trump’s approach to Iran?
A1: The article argues that Iranian oil is the real sweetener. While the official justification for the war is Iran’s nuclear threat, the article suggests that controlling Iranian oil fits Trump’s worldview that “oil is critical to prosperity and power” and that the US must control it.
Q2: What evidence does the article cite to support the claim that the US is preserving Iranian oil infrastructure for future control?
A2: The article notes that while US strikes have hit numerous targets, oil installations have been kept out of the bombing campaign. One Israeli strike on these installations reportedly drew a frown from Washington. Additionally, there are indications that “boots on the ground” may be contemplated for Kharg Island, the tiny speck from which Iranian oil is shipped.
Q3: How does the article explain the US granting a 30-day sanctions waiver for Russian oil in the context of the war?
A3: The article argues that the waiver was driven by the need to keep global oil prices stable and avoid a spike that would hurt American consumers. This demonstrates that oil prices have “huge domestic ramifications in the US” and that economic considerations often trump geopolitical rivalries.
Q4: What historical precedents from Trump’s first term does the article cite to establish his focus on oil?
A4: The article cites two key precedents:
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Withdrawing from the Paris Agreement, freeing the US from obligations to restrict fossil fuel use.
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Withdrawing from the JCPOA (Iran nuclear deal), reintroducing sanctions that strangled Iranian oil exports.
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The Abraham Accords, which built Israel’s ties with oil-rich Arab nations like the UAE.
Q5: What does the article suggest a potential deal between the US and Iran might look like?
A5: A potential deal could involve the US lifting sanctions on Iranian oil exports in exchange for Iran accepting strict limits on its nuclear program. It might also involve a restructuring of the Iranian political system, with Mojtaba Khamenei replaced by a more pliable leadership, and a reorientation of Iranian oil exports away from China towards markets aligned with US interests.
