Countries are rethinking U.S. fossil fuels after Iran war

Washington Post-April!0th2026

U.S. energy firms investing billions of dollars in hulking liquefied natural gas export terminals along the Gulf Coast have capitalized on an insatiable appetite for the fuel from Europe and fast-growing economies in Asia.

As Asia and Europe grapple with the energy disruption created by the war, countries there are scrambling to pivot away from imported fuels, throwing a wrench into the expansion plans of American energy companies and fossil fuels’ long-term outlook.

In countries where the power crunch is so dire that workweeks have been shortened, factories are closing and government rationing has been imposed, leaders are looking beyond just diversifying where they buy fuel to changing what fuels they use. Governments from Manila to Hanoi are leaning into alternatives that range from expanding coal power to endeavoring to build fleets of nuclear plants to increasing their fleets of electric vehicles, all in pursuit of cutting their foreign imports.

“The world has just been traumatized by the geopolitical risk of oil and gas,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “It creates renewed momentum for countries to try to electrify what they can and reduce gas demand to the extent possible.”

At the moment, nations are scrambling to replace the fuel deliveries disrupted by the war, giving a boost to suppliers in the U.S. and Australia in particular. But the long-term outlook for the fossil fuel industry has become more uncertain.

The research firm Wood MacKenzie wrote in a report this week that if the disruption persists, it “could accelerate a structural shift in global energy systems,” leading countries to cut their consumption of imported oil and gas to half of current levels by 2050 — a steep drop compared with the firm’s prewar “baseline” forecast. The report notes that such a shift would do little to slow climate change, as it includes an expansion of planet-warming coal generation.

The ceasefire the United States and Iran announced this week is unlikely to ease the anxieties of Asian and European countries that have been rattled by the energy crunch. Even if a lasting peace deal is reached, supply chains have been badly damaged and risks of future disruptions remain acute. Fuel deliveries will be constrained for months to come, even under the most rosy scenarios.

That has left nations determined to insulate themselves from future military conflicts or countries that wield their exports as an economic weapon, like the United States.

For American producers, the timing is awkward.

While existing LNG export terminals are running near full capacity, largely insulated by long-term contracts, the next wave of projects depends heavily on demand growth in precisely the countries that are reconsidering their commitment.