Look at me, I am the cartel now
In 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) implemented an oil embargo that spiked American and allied oil prices by a factor of four. Ever since, the American foreign policy establishment has harbored PTSD, fearing that the House of Saud can and will hold the West hostage with oil flows alone. OAPEC’s spiritual successor OPEC has been trying: the consortium instituted production cuts in April and November 2023 that have continued into 2025. You haven’t noticed, because the price of oil has not changed. OPEC doesn’t have the geopolitical power it once held, because those cards are in American hands now.
In 2023, the United States produced 22 million barrels of oil per day (bbl/d), compared to Saudi Arabia’s and Russia’s 11M bbl/d each. We exported 4.1M bbl/d, compared to Saudi Arabia’s 7M bbl/d and Iraq’s 3M bbl/d. The liquefied natural gas (LNG) picture is even more stark—in 2023, the United States exported 12 billion cubic feet per day of LNG (Bcf/d), compared to Qatar’s 10 Bcf/d and Russia’s 4 Bcf/d, making the United States the largest LNG exporter in the world. Thanks to shale drilling, the United States produces so much oil, gas, and refined product that the price of West Texas Intermediate (WTI) crude oil has held at pre-COVID prices since early 2023, despite sanctions on Russian crude and inflation and desperate production cuts from OPEC.
This creates a major opportunity to expand US power in the coming decades: the establishment of a new oil and gas cartel that enables us to weaponize the global hydrocarbon trade towards American interests. We might call it the North American Petroleum Harvesting, Transport, and Handling Association: NAPHTHA. The organization only needs Canada as a second member. Crude oil grades are not interchangeable, and many American refineries are tooled for heavy and sour crude from Albertan oil sands as opposed to light and sweet shale oil. Requiring refineries to re-tool would involve a significant outlay of time and capital—and to a large extent, it’s unnecessary. Alberta is already part of the American energy system, producing 85% of Canada’s oil exports in 2023 and sending all that oil to the United States. This duopoly of energy-producing countries would collectively control over 27% of global oil production, compared to 35% from all twelve OPEC member nations. Australia could also join with their 10 Bcf/d of LNG exports, but they’re not strictly necessary for NAPHTHA’s strategic goal.
The most notable challenge to such an organization was Chrystia Freeland, former Finance Minister of Canada. Freeland was the grey eminence behind Justin Trudeau’s flagging government and a principled defender of free trade and liberal internationalism. She would hate NAPHTHA, but she resigned in December 2024, leaving Ottawa bereft of ideas and spine until at least the October 2025 federal elections. This proves beneficial for NAPHTHA, because it only needs buy-in from Alberta, the core of energy production and economic growth in Canada. Once Edmonton is on board, the rest of Canada will follow.
Between their robust (and growing) energy production, their massive combined economy beyond energy production, and the most powerful blue-water navy in human history, the combined forces of NAPHTHA hold an ever-sharpening sword of Damocles over the price of energy. “America First” can be more than mere autarky: with NAPHTHA, the United States can secure raw material flows, market access, capital controls, and sheer dominance by deciding who can buy or sell energy. Yet the Republican party still runs a “House Energy Action Team” focused on securing “energy independence,” as if the United States is still beholden to foreign oil. Presumably, these legislators have not updated their understanding of energy since 2005, when the United States was at the peak of our oil imports.
Times have changed. NAPHTHA provides us with the means to bankrupt the Kremlin, dissolve Iranian power, condemn China to a Yuan-style national collapse, or monopolize global manufacturing in a new mercantilist empire. We just need to acquaint ourselves with three tools that are within our grasp.
Three Ways to Make the World Dance
1. Lowering Prices: Subsidize Domestic Oil Production, Forcing a Glut
The break-even price for shale-based crude oil is $50-60/bbl, versus a current WTI market rate of $70/bbl. For reference, Saudi Arabia’s break-even price is approximately $90/bbl. Gulf states can technically produce oil at a lower cost, but OPEC’s oil revenue pays for those governments to exist.
By contrast, the United States government could pay for NAPHTHA’s oil revenue to exist. Washington could serve as a “buyer of last resort” for production or simply hand out a dollars-per-barrel subsidy. The President already has authorization to purchase oil for the Strategic Petroleum Reserve, independent of Congressional action. If we chose to pay for it, the United States could flood global oil markets, driving oil prices to, say, $40/bbl. At that point, the global price of oil would fall below the European Union’s $60 price cap on Russian oil (lol), starving Russia of cash and allies by stealing away Indian and Chinese buyers.
The United States could replicate this feat with LNG as well. Current exports are only limited by export terminal capacity. Poke into domestic markets, and you’ll find a West Texan gas hub that regularly runs negative supply prices. Fast-tracking permitting for more LNG export terminals (and helping Canada do the same) would enable yet-greater leverage over Russia. Joe Manchin’s Energy Permitting Reform Act of 2024 would have done this and more–Congress should revive it and pass it for the 119th Congress.
2. Raising Prices: Ban Oil Exports, Forcing a Price Spike
In 2015, Congress lifted a ban on American crude oil exports, specifically because shale companies were producing so much product. Congress can authorize the White House to reinstate this ban at will (with room for a whitelist), and then fix the Jones Act so that ships can sail between American ports. This would tear the global oil price into three tiers: 1) the default oil price at $150-200/bbl, 2) the North American domestic oil price at $50-70/bbl, and 3) the NAPHTHA export price at whatever number we like. This differential between domestic supply costs and export demand prices will give American producers and refiners real margins for once. We should encourage the industry to reinvest that into yet more output.
In a world where NAPHTHA spikes prices by squeezing exports, China–which imports more than 70% of its crude oil demand–ceases to function as an economy. Much of China’s meteoric growth is driven by infrastructure investment managed by local government financing vehicles (LGFVs) that borrow recklessly, invest in low-return projects, and frequently hide their books from Beijing. Tripling the price of oil would not only prove devastating to the manufacturing plant that underpins the Chinese economy, but it would also pop this monumental debt bubble that finances Chinese infrastructure and is ultimately backed by financial instruments sold to ordinary households. Imagine subprime, but for everything, with a government that no longer reports the youth unemployment rate because it has gotten that bad.
In fact, every country exposed to the new global oil price would find their output of refined fuels, plastics, and manufactured goods undercut by cheaper American and Canadian product. Their only recourse would be to get on the NAPHTHA whitelist for energy—whatever it takes.
3. Choose Winners: Blockade Energy Transport Corridors; Decide Who Gets Energy
None of the United States’s adversaries have blue-water navies. The Chinese Navy has limited reach outside the First Island Chain, the Iranian Navy has limited reach outside the Gulf of Oman, and the Russian Navy has limited reach outside of dry dock. By contrast, the United States can drop a Marine Expeditionary Unit, complete with air power, infantry, and a Maritime Special Purpose Force wherever we like.
The global “shadow fleet” of oil tankers offers the United States plenty of diplomatic cover for a naval blockade. These ships operate in a legal grey zone as the only means for shipping sanctioned petroleum. Data on these ships is inconsistent, but estimates place this fleet between a few hundred and a few thousand. One study tracked close to 1,000 oil tanker trips carrying Russian oil out of the Baltic Sea. These ships hide their ownership and management, rely on shady insurance (or none at all), skip regular maintenance, spoof their location signals, and sail recklessly…and the Western response has amounted to finger-wagging and polite requests to see documentation. The United States can try Navy SEALS instead: these ships are easy targets for “law enforcement” as collision risks, environmental hazards, and labor violations.
The opportunities for selective disruption of supply chains include:
- Setting two blockades off Gotland and the Dardanelles Strait, strangling Russian energy exports.
- Setting one blockade in the Strait of Malacca, starving Chinese energy imports.
- Setting two blockades across the Strait of Hormuz and Bab al-Mandab, freezing Gulf energy in place.
- Convincing Sri Lanka to allow American occupation of the Manbantota Port, the Belt-and-Road debt trap that Colombo sold back to a Chinese firm.
- “Escorting” oil tankers in the South China Sea to “safeguard them against piracy.”
- Informing Israel that Washington will not object to airstrikes on Kharg Island, Iran’s singular oil export terminal.
These actions break from “international norms,” but the United States has ample leverage to implement these actions. Russia is a strategic threat for every country in Europe, China a threat to every country in the Pacific, and Iran an agent of chaos in the Middle East. None of these powers can follow the United States into the Atlantic or Indian Oceans, so they cannot touch us by conventional means. An American ally on the NAPHTHA export whitelist need only sign on to an American naval action that will starve common enemies without even resorting to a declaration of war. Japan agrees that China is a security threat. Israel is already degrading Iranian air defense. And the eastern flank of NATO has been asking for American backup since they escaped the Iron Curtain.
The Opening Salvo
The international community jokes that the United States is erratic, but they don’t know what American power can do. Our taste for regime change is a fun joke, but since the Second World War we have acted within coalitions and sought stability within global institutions. Even Trump, for all his rhetoric, painted within the lines of the global order.
The world will not believe that the United States is serious until we put NAPHTHA to work.
Waging a petrochemical price war against OPEC would put a shot clock on every petrostate’s budget. Saudi Arabia would have strong reasons to stop killing dissidents and funding terrorists. Iran would find competing options for their nuclear budget. Russia would lose their ability to fight in Ukraine. The United States can outspend—and thus wait out—any leader that thinks they can stand up to the basic economics of global energy. They think we’ll blink first, but we can prove them wrong.
Alternately, holding global oil and gas supplies hostage would destabilize every country not on NAPHTHA’s whitelist. OPEC could partially fill in the oil shortage, but there is no replacing American LNG exports. Moscow and Tehran would enjoy their extra revenue in the short term, but they would face a crisis in the medium term as the Chinese economy they buy product from collapses. Beijing’s petroleum reserve is at most 500 million barrels. They have six, maybe eight weeks before the lights start flickering.
In practice, NAPHTHA need only play hardball for a week. The resulting economic convulsions would crash financial positions, interrupt supply chains, and demonstrate to the world that they have an economy at America’s pleasure. Just one flex would reset the risk profile for everyone. Russia could attempt a nuclear threat, but they would not fire on the United States over a trade war.
China might take such a mask-off moment as their cue to rush at Taiwan, but they would lose. I find it strange that contemporary security discourse in the United States, the official nation of Globemaster Burger Kings and Pacific ice cream barges, forgets about logistics in a great power conflict. The PLA’s amphibious assault and landing craft need diesel fuel to cross the Taiwan Strait. Most of that diesel necessarily relies on imported crude oil sourced from a handful of sea lanes. The PLA Navy has limited reach and few port options beyond the First Island Chain. Any attempt to secure the Strait of Malacca would require thundering past Vietnam and the Philippines, which have both trained with the United States for this exact scenario. Interdicting oil and LNG tankers in the Indian Ocean would exploit a debilitating logistical weakness at the edge of Beijing’s operational range. No amount of drone or ammunition production can replace an acute fuel shortage.
Forging a New International Order
The United States founded the liberal international order in 1945 to prevent nuclear strikes on American soil. We knew that the only power who would push that button was Soviet Russia, and that they needed friends to keep up. So we set about convincing the world that secular market economies were better than Communism. We appointed ourselves as a global police force to support allied nations, and we held ourselves to decorous standards. We made compromises on democratic values–Park Chung Hee, Mohammad Reza Shah, Deng Xiaoping–because they contained the Soviets. Democracy and liberalism were the rhetorical themes, but they were the means, not the end. We ultimately sought to resist Communism.
Communism has since failed. The only strategic threats to American citizens are a smattering of petrostates and a friendless nation that would shatter without their energy. We won, more than thirty years ago. So why do we still pay for the liberal international order? Why do we act in theaters that affect allies more than us? Why do we refrain from leveraging the massive latent power that the energy economy gives us over every other nation?
It is time to jettison the mimetic rituals of the international order simply because they are familiar or polite. We must ask ourselves, seriously, what we want from the rest of the world in the 21st century. Those core interests must then undergird the creation of a new global system.
If we want to promote democracy, why do we let Saudi Arabia kill dissidents and fund terrorists? Why do we tiptoe around Taiwanese and Ukrainian independence efforts? Why would we invest in Angola without making them clean up their human rights record?
If we want to advance American business interests, why do we let the EU saddle American firms with byzantine regulations? Why do we let China steal intellectual property? Why do we refrain from the currency manipulation that everyone else engages in?
And if we simply want American primacy, why stop short of exercising that dominance to its fullest extent? Why not choose who wins, and who loses? We already lead the world in economic, cultural, and military power–why not get our money’s worth?
