At The Fusion Report, we focus on fusion energy and its long-term prospects as a nearly unlimited clean energy source. However, it is important to look at fusion in terms of today's prospects, which include a war with Iran and its impacts on the fossil fuel economy today. In particular, we face a difficult balance between preventing a nuclear Iran, and promoting the use of oil as a critical component of the economy, especially for our allies who rely to a greater extent on gulf state oil than we do. With that in mind, let's look at how these different factors play together to focus our choices.

Gulf Petrodollars in the US vs in Europe and Other Allied Countries

The United States currently imports only a modest share of its oil from Persian Gulf countries, and that share has declined substantially over the past decade as domestic production has risen. In the early 2000s, the U.S. routinely imported well over 1.5 million barrels per day of petroleum from the Persian Gulf, but by the late 2010s those volumes had fallen, and in 2018 imports from the region reached record lows as U.S. shale output surged and overall net oil imports dropped sharply. In 2014 about 25% of U.S. crude oil imports came from Persian Gulf suppliers, whereas by 2024 that figure was down to roughly 8%, and recent monthly data show Persian Gulf oil now accounts for under 10% of total U.S. petroleum imports, well below the long-term average of around 17%. This means that while the U.S. still buys oil from the Gulf and remains exposed to global price shocks, its direct spending on Gulf oil as a share of its import bill has trended steadily downward over time, especially since the mid-2000s shale boom.

Since the 1970s, Europe and Japan have consistently spent more on Persian Gulf oil than the United States, both in physical volumes and as a share of their consumption, and that gap has widened as U.S. reliance has fallen. By the early 1970s, about 80% of European and Japanese oil imports came from the Gulf and North Africa, compared with only a small fraction of U.S. consumption, and this basic pattern of higher dependence among U.S. allies persisted even as Europe later diversified toward Russia and other suppliers. Today, Japan still sources around 95% of its crude from the Middle East—almost all of it from Gulf producers such as Saudi Arabia, the UAE, Kuwait, and Qatar—so its import bill remains tightly tied to Gulf prices and shipping risks. 

Alternatives to Gulf Oil-Based Energy for the US, Europe, and Japan

While the word has reduced its dependence on Gulf oil since the OPEC oil crisis of 1973, it's been far from entirely successful. While the U.S. has reduced Persian Gulf oil to under 10% of its total imports, the European Union still gets roughly 20% of its crude imports from the Middle East. Worse yet, Japan gets almost all of its oil through the Gulf. And the U.S. and NATO both shoulder the cost of military support for Europe and Japan’s Gulf oil imports. So we still pay for Gulf oil indirectly, regardless of who uses it.

What are the alternatives? Unfortunately, petroleum is not easily replaced by alternative energy resources. In 2022, the transportation sector accounted for roughly 66.6% of total U.S. petroleum consumption. Gasoline constitutes the largest share of transportation fuel (approx. 57% by energy content), followed by diesel (23%) and jet fuel (12%). The numbers for Europe and Japan are also similar, with Europe using between 66 and 70 percent of imported oil for transportation. Long-term, electrification of transportation can cut this percentage of petroleum down for ground-based transportation, though less so for air-based or sea-based transportation.

For non-transportation based usage, there are more alternatives for the use of petroleum as an energy source. In particular, solar energy is a viable alternative to petroleum for significant parts of the U.S. economy, especially in backup electrical generation when combined with battery energy storage systems (BESS). Solar already provides a growing share of U.S. electricity, and utility-scale solar is the fastest-growing source of new generating capacity, with over 40 GW of additional capacity planned for 2026 alone. As more vehicles, heating systems, and industrial processes switch from oil-based fuels to electricity, expanding solar generation can directly displace petroleum demand, particularly in transport and oil-fired power or backup generation.

Conclusion. Reducing Gulf Oil Usage Still Makes Sense

The United States is relatively resilient but not fully immune to disruptions in Gulf oil   shipments. The key reason is that the U.S. now produces most of the oil it consumes and imports only a modest share from the Persian Gulf, so a physical cutoff from that region would not create immediate domestic shortages in the way it would for many Asian economies. However, Gulf disruptions still strongly affect the U.S. through global price spikes: crude oil is priced in a global market, so any loss of Gulf supply drives up world prices and, in turn, U.S. gasoline, diesel, jet fuel, and petrochemical feedstock costs.

Worse yet, our allies import considerable amounts of oil from the Gulf states, making pricing impacts of oil disruptions even for us. Even though the largest Asian oil importer, China, is not an ally of the U.S., they are still a consumer of oil, and still affect overall price. As the current issues with Iran illustrate, the effect of world relationships on market prices for oil are significant, and we cannot escape these impacts even if we are not a net importer of oil. Developing alternatives to imported oil solves a great number of problems, whether solar or (longer term) fusion.