Our cheap gasoline is really expensive. The U.S. just grabbed Venezuela’s president and is fighting a war with Iran at the same time. People are calling these oil wars. Start with Venezuela. We think Saudi Arabia or Russia holds the biggest oil reserves on Earth. It’s Venezuela. By a lot. The problem was dumb management that ran the oil industry into the ground and a sanctions regime that kept it locked up.

The U.S. operation captured Maduro and within weeks, billions in oil sales restarted. It doesn’t mean the whole operation was just a resource grab, modern energy geopolitics is more complicated than a heist. But it does mean oil wasnt far from the center of the logic.

Now look at Iran. Iran’s leverage is its right next to the Strait of Hormuz. 1 out of every 5 barrels of oil traded globally moves through that channel. We see oil prices spike, shipping panics, and governments making phone calls they really didn’t want to make. That’s a country with a hand near a light switch for the global economy. And it might kick off a financial crisis soon.

We do a lot for oil

1991: Iraq invades Kuwait. The fear was that Saddam was positioning himself to dominate a massive share of global supply. Saudi Arabia was next door and nervous. The coalition went in because one man was getting too close to controlling the whole oil system.

2003 was messier, terrorism, WMD fears, post-9/11 politics. But Iraq’s enormous oil reserves were part of the strategic picture. Energy shapes the terrain every conflict happens on.

For decades, the U.S. Navy patrols the shipping lanes that move oil around the planet. Persian Gulf. Strait of Hormuz. Indian Ocean corridors. Tankers move safely through dangerous water because someone credible is watching. That security costs us trillions over time. Some analysts call it a hidden subsidy for the global oil system. Which is an uncomfortable way to think about the defense budget, but it ain’t wrong.

Then there’s the financial architecture underneath all of it. In the 1970s, the U.S. and Saudi Arabia built the petrodollar system. Oil priced in dollars. Petrodollar earnings recycled into U.S. financial markets. Countries around the world needed dollars just to buy energy.

That wired oil markets and dollar dominance together in ways that are really hard to separate fifty years later.

Some people argue every conflict near a major oil producer is secretly about enforcing that arrangement. That’s too clean. The dollar dominates because of deep financial markets and institutional trust built over generations, not just because carriers are in the Gulf. But carriers being in the Gulf doesn’t hurt.

We are in a stress test. Two critical spots in the global energy system went unstable at the same time. A country sitting on the world’s largest reserves. A country with geography that gives it leverage over one-fifth of global oil trade. Russia has stakes in both.

Oil doesn’t explain everything. But if you want to understand why the same places keep showing up in global crises decade after decade, it helps to look at where the oil is. And more importantly, where it has to go.​​​​​​​​​​​​​​​​