The most disorienting seismic shifts attributable to the fracking revolution have been felt in the Middle East, where oil served as the lifeblood of rogue regimes for almost a century.
The Bush administration found itself at a disadvantage in its effort to combat an insurgency in Iraq that was fueled in large measure by Iran. “A big part of the reason why they didn’t ultimately impose really harsh sanctions on the oil industry is because they were concerned about what that would do to the oil market, the oil price, and the global economy,” said Sam Ori of the University of Chicago’s Energy Policy Institute. But by December 2011, when the Obama administration placed sanctions against the Iranian oil sector, the global oil supply had increased to the point that few feared negative economic ramifications from reduced Iranian output or that Tehran would benefit from increased global oil prices amid a supply crunch.
The Obama administration lifted those short-lived sanctions as part of its effort to reach an accommodation with Tehran over its nuclear program. When the Trump administration reimposed them, the effect was immediate. Iranian crude exports plummeted. International oil companies abandoned plans to develop Iranian energy deposits. The Iranian public revolted against their new normal and, by late 2019, posed an existential threat to the regime when Tehran was forced to pare back state-provided gasoline subsidies. All the while, the price of petroleum products in the U.S. remained stable.