Somewhere in the Arabian Sea, on a day that blurred into the 265th consecutive day without a port call, a sailor aboard the USS Abraham Lincoln had to be talked down from the edge of the flight deck. It was not an isolated incident. Family members back home had spent weeks describing a ship running short of toothpaste and deodorant, its air conditioning failing in triple-digit heat, its crew logging more consecutive days at sea than any American carrier had managed since the darkest months of the COVID lockdowns. The Navy's own numbers made the case better than any critic could: the previous record, set by the USS Dwight D. Eisenhower in 2020 under pandemic conditions, was 206 days. Lincoln blew past it by nearly two months and kept going.

The fix, when it finally came, was not a fix so much as a relocation of the problem. On August 19th, the USS George Washington pulled into the Central Command theater to relieve its exhausted counterpart. That sounds routine until you note where George Washington came from: Yokosuka, Japan, home port of the only forward-deployed aircraft carrier the United States keeps in the Western Pacific. For a week in August, in the middle of a live confrontation with China over Taiwan's status, an escalating standoff in the South China Sea, and a North Korean regime that has spent the summer rejecting every American overture, the U.S. Navy had zero forward-postured carriers in the region built explicitly to deter all three.

Forbes contributor, Peter Suciu, called it plainly:

"The move, while addressing the Lincoln's plight, leaves a strategic void in the Western Pacific, potentially impacting deterrence against China and exacerbating regional tensions amid renewed Houthi attacks."

Lincoln's ordeal raises a question the Pentagon would rather not answer directly, and the answer most pundits have already assumed: that the Iran war has exposed how thin America's kinetic bench actually is. A superpower with eleven carrier strike groups on paper should not need to run one ship 265 days past the previous wartime record, the reasoning goes, nor should relieving it require emptying out the only forward-deployed carrier in the Pacific. That is the read the moment invites. It is also, on closer inspection, the wrong one — the carrier schedule and the reallocation happening a few hundred miles away on the Korean peninsula are not evidence of a military running out of room. They are evidence of one making choices about where its depth is actually needed, and about which allies no longer need to be covered as closely as they once did.

The clearest evidence isn’t the carrier schedule. It’s the magazine behind it — and the two are really the same story told in different hardware. A carrier run 265 days past its limit and an interceptor stockpile burned down by two-thirds are both symptoms of a single condition: a military that built its Pacific posture assuming spare capacity it no longer has once a live war starts drawing on the same pool of ships, batteries, and munitions. The Center for Strategic and International Studies, tracking the fight since it began on February 28th, has published a running series of estimates on what the war has cost the U.S. in interceptors, and the trend line only moves one direction. CSIS put the pre-war Patriot inventory — counting the platform’s two most modern variants — at roughly 2,300 missiles, alongside 452 THAAD interceptors. By early August, the firm’s analysts estimated the Patriot stockpile had fallen by around two-thirds; CNN’s reporting, citing separate sources familiar with the latest internal inventory count, put THAAD depletion at closer to 80 percent. A U.S. official told ABC News only that both stockpiles were “extremely low,” declining to confirm hard numbers. Whichever figure is closest to accurate, the direction and the order of magnitude are not in serious dispute.

What makes the shortage dangerous, according to Mark Cancian, the retired Marine colonel who co-authored the CSIS analysis, is that there is no substitute waiting in reserve:

"We don't have that many [interceptors] left, and there are no good substitutes. If we run out of Patriots, then the missiles get through."

As nearly happened on July 17th, when an Iranian strike slipped past American and Jordanian defenses and killed three U.S. soldiers at Muwaffaq Salti airbase. CSIS estimates it will take a minimum of three years to rebuild the interceptor stockpile to pre-war levels, a timeline constrained less by money than by manufacturing lead time on weapons that take two to four years to build under the best of circumstances. Gen. Dan Caine, the chairman of the Joint Chiefs, reportedly warned the White House about the shortage risk in the weeks before the administration decided to strike Iran in the first place — a warning that did not change the decision, only the terms on which the decision would later be judged.

The White House’s rebuttal to all of this deserves to be taken seriously rather than waved off, because part of it is true. Trump has been blunt about it:

Pentagon spokesman Sean Parnell has insisted the military:

America's military is the most powerful in the world and has everything it needs to execute at the time and place of the President's choosing. We have executed multiple successful operations across combatant commands while ensuring the U.S. military possesses a deep arsenal of capabilities to protect our people and our interests."

Neither claim is empty bravado. The shortage is real, but it is narrower than the “hollowed out” headlines suggest. Ryan Brobst of the Foundation for Defense of Democracies has pointed out that air-dropped munitions — the gravity bombs and guided kits that make up the bulk of any sustained bombing campaign — remain stockpiled deep enough that the U.S. is nowhere close to running low, and Hegseth himself has confirmed the Pentagon holds what amounts to a near-unlimited supply of guided bombs. Lockheed is simultaneously ramping standoff-missile production toward 1,100 units a year, up from 720. The strain is concentrated almost entirely in one narrow category: the interceptors that shoot other missiles out of the sky.

As Kelly Grieco of the Stimson Center put it:

"Every time the U.S. deploys a missile or missile interceptor in Iran, Grieco said it is not available in another region. ‘‘You can go through these things much faster than you can replace them.’’

That narrow category happens to be the one most relevant to South Korea: the interceptors under acute strain are precisely what Washington pulled off the peninsula, and precisely what USFK commander Gen. Xavier Brunson insisted Korea could do without.

So let’s see what South Korea can do without.

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On the morning of March 18, 1938, Mexican President Lázaro Cárdenas went on the radio and announced that his government was seizing the assets of every foreign oil company operating on Mexican soil — American, British, Dutch, the lot. It was an extraordinary act of economic defiance for a country that depended on those same foreign firms for the majority of its export revenue, and Cárdenas knew it. The companies had ignored a Mexican Supreme Court labor ruling once too often, and the president gambled that national pride would outrun the fiscal consequences. He was right. Within days, Mexicans across the social spectrum were lining up outside the Palacio de Bellas Artes to donate jewelry, livestock, and pocket change to help the government cover the compensation bill. Pemex — Petróleos Mexicanos — was born that spring, and with it, a national mythology in which state control of the subsoil is not merely policy but identity.

Eighty-eight years later, that mythology is still load-bearing in Mexican constitutional law, and it is about to collide, in slow motion and in plain sight, with a global diesel shortage that doesn’t much care about anyone’s founding myths.

The other anniversary worth noting arrived this month, in Panama, a few miles from where the old U.S. Army School of the Americas once stood at Fort Gulick before political pressure pushed it to Fort Benning, Georgia. On August 12, Secretary of War Pete Hegseth stood in front of the newly expanded, nineteen-nation Americas Counter Cartel Coalition and framed the moment as a wholesale reorientation of U.S. Southern Command — a command he said had spent the prior eighteen months insufficiently focused on the hemisphere it was named for:

“This is a different Southcom; this is a different mission,” he said. “We are focused on military capabilities against real threats who need to be deterred and defeated, and we're going to give them everything they need to do it, on behalf of the American people.”

He told American troops training at the region’s Jungle Operations Training Center the following day, standing a short drive from ground the old School once occupied. The coalition’s new motto, unveiled at the same event:

“That's the mentality I want to have inside this room. Now we're good people that do good things. But ultimately, we're dealing with bad people that have done a lot of bad things to a lot of good people for a very long time.”

We have written before about the pattern-matching between the old Banana Wars and today’s hydrocarbon diplomacy — Marines then, coast guard cutters and drone squadrons now, fruit companies then, refineries now. What’s changed since the Cárdenas era is the mechanism. Washington no longer needs a garrison at the customs house to secure a flow of barrels. It needs a signature on a trade annex. Mexico and the United States, as it happens, are already at the table — and the clock on the product shortage is doing the rest of the negotiating for them.

The USMCA’s Article 34.7 requires a joint review by July 1, 2026, at which point the three parties decide whether to extend the agreement sixteen years or fall into a cycle of annual renegotiation. On paper, the review is about automotive rules of origin, labor standards, and Chinese-linked investment — the topics that dominate the trade press. Energy doesn’t even get its own chapter; NAFTA’s provisions were folded elsewhere, alongside language that simply acknowledges Mexico’s constitutional bar on foreign ownership of hydrocarbons.

That acknowledgment is now the fault line. Mexico’s October 2024 and March 2025 constitutional amendments reclassified Pemex and the Federal Electricity Commission as “public enterprises” — a status change that sounds cosmetic and isn’t. The reforms guarantee CFE priority grid dispatch and mandate a minimum 54% state stake in any mixed electricity project. The Office of the U.S. Trade Representative has flagged the entire framework as a likely breach of USMCA’s non-discrimination and state-owned-enterprise commitments, and both Washington and Ottawa have opened formal consultations. CSIS analysts tracking the review call the most probable outcome a “painful extension” — the treaty survives, but energy, autos, and China policy get renegotiated on a rolling basis, with investment uncertainty as the toll; Mexican inbound investment is already tracking roughly 10% below last year’s pace.

Here’s the detail that’s gone largely unremarked outside specialist trade press: the U.S.-Mexico negotiating track has moved with unusual speed relative to Canada’s comparatively frozen file. The tidy explanation is nearshoring — Mexican manufacturing FDI is running above $40 billion a year, and neither capital wants that momentum disrupted. That’s true, but incomplete. The real accelerant is Mexican refined product, and Washington’s urgency traces back not to Mexico City but to the Strait of Hormuz.

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On December 2, 1942, under the west stands of a squash court at the University of Chicago, Enrico Fermi's team coaxed the first self-sustaining nuclear chain reaction out of a pile of graphite blocks and uranium oxide. Most of that uranium came from a single mine in the Belgian Congo: Shinkolobwe, in the copper-rich hills of Katanga, then the richest uranium deposit ever discovered. Belgian mining engineers had spent two decades trying to figure out what to do with the "worthless" radioactive byproduct clogging their copper concentrate before Washington bought the entire above-ground stockpile in 1942, without telling Congress what it was for. Within three years, that ore had leveled two cities.

Eighty-four years later, Katanga is exporting uranium to a nuclear power again. Nobody bought it this time. Nobody declared it. And by the time anyone noticed, it had been moving for two decades, hidden inside the world’s most celebrated green supply chain. Let’s build the case.

Rank the worst uranium and radiological mining incidents of the modern era and a pattern emerges. Wismut, in East Germany, gave rise to the highest recorded rates of occupational lung cancer in mining history. Church Rock, New Mexico, 1979: a tailings dam failure sent more radioactivity into the Puerco River than Three Mile Island released into the air that same year. Elliot Lake, in Ontario. Jáchymov, in Czechoslovakia, worked partly by political prisoners. Every one of these is a story about a state that knew exactly what it was extracting, regulated it badly, and paid for the failure in cancer registries decades later.

Katanga’s artisanal and small-scale cobalt sector belongs in that conversation, but it’s a stranger case, because for the first time the state in question doesn’t appear to know — or claims not to know — that it’s extracting a strategic radiological material at all. Somewhere between 150,000 and 200,000 artisanal miners work the Copperbelt’s cobalt seams by hand, digging with rebar, sorting ore with bare fingers, sleeping in tunnels that periodically collapse and kill dozens at a time. None of them carry dosimeters. None of the concentrate they produce is screened for uranium before it enters the formal supply chain. It just rides along, tonne after tonne, embedded in the same cobalt hydroxide that ends up in the cathode of an EV battery.

Why does that happen here and nowhere else? Geology, not policy. In most of the world’s uranium provinces — the unconformity deposits of Saskatchewan’s Athabasca Basin, the sandstone rolls of Wyoming, the granite veins of the Erzgebirge — uranium occurs mostly on its own, in ore bodies distinct from base metals. Katanga doesn’t work that way. The Copperbelt’s stratiform ore system deposited copper, cobalt, and uranium together, in the same rock, roughly 600 to 650 million years ago. Uranium there isn’t a contaminant sitting next to the target mineral. It’s a structural constituent of the ore itself, which is precisely what made Shinkolobwe so valuable to the Manhattan Project — and precisely why the modern cobalt boom can’t avoid dragging uranium along with it. Shinkolobwe itself has been under a presidential exclusion order since 2004, its uranium legally classified as a “reserved mineral substance” that cannot leave the country. But Shinkolobwe was never the only uranium-bearing deposit in Katanga, just the richest one. Congolese customs monitors weigh, assay, and tax the copper and cobalt content of every shipment leaving the country. Uranium is the one constituent nobody checks.

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Corporate amnesia works until the technology you abandoned reappears inside someone else’s industrial strategy.

In July, Ford and Geely announced a Europe-focused joint venture at Ford’s Valencia plant in Spain. Ford will retain majority ownership, but the venture will rely heavily on Geely platforms, with a jointly developed “multi-energy” crossover expected in 2028. That phrase deserves attention. “Multi-energy” is not merely product language; it reflects a shift away from the recent Western assumption that the vehicle transition has one inevitable endpoint.

In 1989, on the back of the Alternative Motor Fuel Act, Ford began moving flexible-fuel technology from its research labs into production engineering under R&D executive Roberta Nichols. The target was 1993. The vehicle was the Taurus: 2,800 units in the first production run, with volumes expanding gradually through 1994 and 1995. It was engineered to run on M85, a blend of 85% methanol and 15% gasoline, or on straight gasoline if the driver could not find a station carrying the alternative fuel. In 1996, Ford went further, releasing a dual-fuel Taurus capable of running on methanol or ethanol blends—the industry's brief, forgotten flirtation with genuine fuel flexibility.

The program had real scale behind it. By 1997, more than 21,000 M85 vehicles were on American roads, with roughly 15,000 in California alone, supported by more than 100 public and private fueling stations. Bank of America converted 300 vehicles to methanol. The Postal Service, the Army, and fleets in Los Angeles, San Francisco, Baltimore, and Pennsylvania all ran pilot programs. Ford alone logged seven million methanol miles during the program’s first three years. This was not a science-fair curiosity. It was one of the largest alternative-fuel demonstration fleets in American history, and by most technical measures, it worked.

It died anyway, for two boring and entirely fixable reasons: a thin refuelling network and a fuel that cost roughly two cents more per mile to run than gasoline. Neither problem was about chemistry. Both reflected the fact that nobody with durable political weight was willing to fix them. California's program limped along for another decade before the state formally pulled the plug in 2004, after 200 million cumulative miles. Ford's Chinese joint venture, launched around the same period to export related technology, quietly wound down alongside it. Detroit closed the file and never looked back.

Methanol, CH₃OH, is the simplest alcohol. It can be made from natural gas, coal, biomass, or—in principle—from captured carbon dioxide and renewable hydrogen. It has a high octane rating and can be used in suitably modified internal-combustion engines. Its principal drawback is lower volumetric energy density: a vehicle needs more fuel, a larger tank, or must accept less range than with gasoline.

That weakness ruled methanol out as a mass consumer fuel. It never ruled it out as an industrial one.

Methanol is a major industrial feedstock for formaldehyde, acetic acid, resins, adhesives, engineered wood, plastics, MTBE, marine fuel, and dimethyl ether. It also sits upstream of methanol-to-olefins, the process that converts it into plastic feedstock. It is therefore not merely a fuel competing with gasoline. It is a flexible intermediary molecule connecting construction, chemicals, plastics, shipping, and energy security.

Methanol's American failure is usually presented as a story of poor economics; however, this is an incomplete diagnosis. Methanol did not simply lose to gasoline. It lost to ethanol, and ethanol had what methanol lacked: farmers.

The ethanol lobby was built around corn processors, grower associations, agricultural-state legislators, and a voting bloc that could be activated across much of the Midwest. Ethanol created a protected outlet for surplus corn and reduced dependence on direct farm support. Methanol had Ford's R&D department, refinery and coal interests, and a handful of California air-quality regulators. The political mismatch was obvious.

The federal government layered blender credits, agricultural support, and eventually the Renewable Fuel Standard’s mandated demand on ethanol. Even politicians who backed ethanol later acknowledged what game had been played. Years after leaving office, Al Gore, who cast a tie-breaking Senate vote for ethanol tax breaks in the 1990s, admitted that massive subsidies for first-generation ethanol were poor policy—something he had supported in part because of farm politics in Tennessee and Iowa. It was, in other words, an inconvenient truth:

“It is not a good policy to have these massive subsidies for first-generation ethanol” was a position he’d only ever backed to court “farmers in his home state of Tennessee and the first-in-the-nation caucuses state of Iowa.”

Strip away the biofuel branding and what actually happened in the 1990s wasn't a technology bake-off. It was a lobbying contest, and the alternative fuel with a concentrated agricultural constituency beat the alternative fuel with a diffuse industrial one. Nobody in Washington sat down and decided methanol was strategically worthless. They decided ethanol had better lobbyists, and the distinction between those two decisions turned out to matter quite a lot thirty years later.

China's methanol story did not begin as a clean break from Ford's experiment. It began, in part, as an extension of it. In 1995, Ford began working with China's State Science and Technology Commission on flexible-fuel vehicles. Ford later exited methanol development as ethanol consolidated its political position in the United States. China retained the underlying pathway.

Starting in 2012, Beijing ran a state-backed program around 150 Geely M100 methanol taxis in Jinzhong, Shanxi, a coal-rich province. The goal was explicit: determine whether China could use a domestically producible fuel to reduce exposure to imported liquid energy. By 2016, the program had expanded across Shanxi, Shaanxi, Guizhou, and Gansu—provinces with coal reserves and methanol-production capacity..

By 2018, more than 1,000 methanol vehicles had logged more than 184 million kilometres. In 2019, eight ministries issued national guidance encouraging methanol-vehicle deployment in suitable regions. Shanxi renewed and expanded its program in 2023, with particular attention to freight transport and commercial vehicles.

China's current methanol fleet remains modest relative to its total fuel market, but it is real: vehicles, engines, fuel standards, refuelling infrastructure, chemical capacity, and industrial users already exist. More than 50,000 methanol vehicles were operating in China by late 2024, overwhelmingly commercial models. Methanol can be used directly in some vehicles, converted into dimethyl ether for selected diesel-displacing applications, or directed into chemical production.

Enter the Iran War…

Iran is a major methanol producer and exports the overwhelming majority of its output, principally to China and India. Its methanol sector rests on cheap, price-linked South Pars gas, coastal export infrastructure, and a sanctions-era need to monetize hydrocarbons through products easier to market than crude. When fighting disrupted Hormuz and Gulf energy infrastructure, methanol was swept into the broader shock alongside LNG, ammonia, urea, sulphur, styrene, and other products tied to regional gas and refining systems.

Markets initially treated the event as a standard oil shock. It wasn't. Crude got the attention because Hormuz carries an immense share of global supply, but the binding constraint sat downstream — damaged refineries, disrupted exports, and too little spare capacity to replace what an industrial economy actually burns. Conflict-related outages had already removed roughly 9% of global refining capacity at one point, including an estimated 3 million barrels a day in the Middle East Gulf, and refined products tightened harder than crude from the outset: rebuilding refinery capacity and product logistics takes far longer than a crude-price shock takes to fade.

Diesel moves freight, food, and factory goods; jet fuel keeps aviation running; LPG and naphtha feed petrochemical systems. Crude inventories can buy time, but they can't manufacture any of it once refineries are offline and the plants still running are already maxed out.

China's methanol exposure was real but manageable. The Middle East supplies a large share of China's imported methanol, and Iran is structurally important to that trade. Yet imports are a limited share of China's overall methanol consumption because Beijing spent years building domestic coal-based capacity. Iranian cargoes mattered at the margin; they did not define the Chinese market.

That left domestic Chinese coal-to-methanol producers in a favorable position. They could sell into a market repriced by war while relying on domestically controlled feedstock. U.S. Gulf Coast producers benefited differently, because domestic gas prices did not move in lockstep with LNG-linked markets. India, more dependent on imported cargoes and more constrained by sanctions-related trade diversion, was left holding the more expensive end of the market.

By June, Hormuz had reopened—it never really closed—and the first panic had faded. The underlying problem had not. Higher product and chemical prices were already feeding into construction, transport, automobiles, and industrial demand. The war had created a supply-chain issue, not merely a temporary commodity spike.

The next question is what China did with the window — and why the products shortage now bearing down on the rest of Asia looks different from where Beijing is standing.

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Pevek is not a place most people could find on a map, and until recently, there was little reason to try. It sits on the East Siberian Sea, above the Arctic Circle, home to a few thousand people, a decommissioned gulag-era port, and — since 2019 — the only floating nuclear power plant currently operating anywhere on Earth.

The vessel is called the Akademik Lomonosov. It is, in essence, a 21,000-tonne barge with two small marine reactors bolted where a cargo hold used to be, towed 5,000 kilometers from a St. Petersburg shipyard and moored permanently against a purpose-built breakwater. It generates a modest 70 megawatts, enough to retire an aging coal plant and a Soviet-era reactor that was overdue for its own funeral. It also supplies district heat and feeds a regional grid that serves industrial load across western Chukotka — and Rosatom isn't stopping at one unit. It has since signed on to power the nearby Baimskaya copper-gold deposit, one of the largest untapped mineral concessions in the Russian Arctic, not with the original Lomonosov itself but with a dedicated follow-on fleet: four new RITM-200-class floating units, currently under construction, purpose-built for exactly this kind of industrial anchor tenant.

Rosatom did not build the Lomonosov because Pevek was clamoring for nuclear power. It built it as a demonstrator — a proof of concept for a class of vessel the Russian state nuclear monopoly intends to mass-produce and lease abroad, to any coastal state with a remote grid, a mining concession, or a desalination problem it would rather not solve with someone else’s reactor. The pitch write-up itself in Rosatom’s own literature is explicit that follow-on, “optimized” units are being designed from the outset for export. Nuclear power, in other words, as a portable geopolitical asset — something you can float to a client state, connect to shore power, and leave there for forty years, with all the entanglement that implies.

The demonstrator, notably, just graduated. A thirteen-member team from the Moscow Center of the World Association of Nuclear Operators finished a two-week audit of the Lomonosov on July 29th, examining everything from maintenance protocols to emergency preparedness, and came back with fewer flagged deficiencies than the previous review in 2022. The plant’s director wasted no time framing the result: the facility, he said, now ranks alongside Russia’s flagship land-based stations, Balakovo and Kalinin. Whatever one makes of a state nuclear monopoly grading its own homework favorably, an independent industry body signing off on operational parity with established terrestrial plants is exactly the credibility marker Rosatom needs if it intends to sell this thing to a third country rather than merely operate it for one. The prototype phase, in other words, is over. The sales phase is beginning — and Washington’s Outer Continental Shelf memorandum, signed eigth days earlier, now reads less like proactive planning and more like a catch-up move.

It is tempting to treat this as a novel Russian innovation, a clever bit of statecraft cooked up in the Rosatom boardroom sometime in the 2010s. It isn’t. The United States built one first, used it for eight years, and then apparently decided the whole idea wasn’t worth remembering.

In 1963, the U.S. Army pulled a rusting World War II Liberty ship out of the Mobile Reserve Fleet — the SS Charles H. Cugle, a bulk cargo hauler with no particular distinction beyond having survived the Pacific theater — and sent it to a shipyard in Mobile, Alabama, to have its engines torn out. In their place went a pressurized water reactor, 10 megawatts, designated MH-1A: Mobile, High-power, first of its kind. The renamed vessel, the Sturgis, went critical at Fort Belvoir in January 1967, becoming the world’s first floating nuclear power station roughly fifty-two years before the Russians managed the same trick.

Its assignment came almost by accident. A drought—a.k.a “climate change”— in 1968 had drained Gatun Lake, the reservoir that both fills the Panama Canal’s locks and spins the hydroelectric turbines that power the Canal Zone. The Army towed the Sturgis down to Gatun Lake and plugged it into the grid, freeing up lake water for lock transits instead of electricity generation — a nakedly practical arrangement, dressed up afterward in official Army retrospectives as a triumph of atomic-age ingenuity. For eight years, an American nuclear reactor quietly kept the busiest canal on the planet open, moving materiel toward a war in Southeast Asia that needed every lock cycle it could get.

Then, in 1976, the Army decided the juice wasn’t worth the squeeze. A decade of upkeep on a specialized reactor, a seventy-person crew, and — this detail deserves more attention than it usually gets — a tightening regulatory environment as the newly created NRC began applying civilian-grade compliance standards to a vessel designed under wartime urgency, made a 10-megawatt novelty item look expensive next to a diesel generator. The Sturgis was towed home, defueled, and left to rust in the James River Reserve Fleet for the next thirty-seven years, a nuclear ghost ship nobody quite knew what to do with, until it was finally hauled to Galveston for scrapping in 2015 and fully dismantled by 2018.

That is the entire arc of America’s first experiment with floating nuclear power: born of drought, killed by cost accounting, forgotten for two generations. It is, in hindsight, a strange thing to have walked away from. And in 2026, Washington is walking back.

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Every summer, the energy world pauses to consult its bible. The Statistical Review of World Energy — the report formerly stamped with BP’s logo, now published under the Energy Institute’s banner — lands with its usual authority: country-by-country breakdowns of oil, gas, coal, nuclear, and renewables consumption, sliced fine enough to tell you how much diesel Uzbekistan burned last year. Analysts, traders, and central bankers treat it as ground truth. It is, in its way, the closest thing the energy business has to a census.

And yet buried in that census is a rounding error the size of a small nation’s energy grid, hiding in plain sight because nobody asks it to identify itself. The United States military does not appear as a line item in the Statistical Review. It doesn’t need to — its consumption is folded quietly into the broader U.S. national totals, indistinguishable from the diesel burned by a Kansas City delivery fleet or the jet fuel consumed by a Delta 767. But unlike Delta, the Pentagon doesn’t file a 10-K. It doesn’t hold earnings calls. It is, by a wide and uncontested margin, the largest single institutional consumer of petroleum and energy on the planet, and it has spent the better part of two decades declining to make that fact easy to find.

It’s an omission of convenience — the kind bureaucracies produce not through malice but through decades of nobody in particular being incentivized to fix it. But omissions of convenience are exactly the kind worth pulling on, because they tend to sit directly on top of the most interesting stories.

So let’s pull.

Start with the plain scale of the thing. Researchers who’ve spent careers trying to pin down Pentagon energy use — chief among them Boston University’s Neta Crawford, whose work for Brown University’s Costs of War project remains the most rigorously sourced public accounting available — have consistently found that the Department of Defense has accounted for somewhere between 77 and 80 percent of all U.S. federal government energy consumption in every year since 2001. Not “a meaningful share.” Four-fifths.

All this capacity for and use of military force requires a great deal of energy, most of it in the form of fossil fuel." Neta Crawford

Zoom out to the national level and the number shrinks, but not the way you’d expect it to matter less. DoW’s footprint works out to roughly one percent of the entire United States’ total energy supply — one institution, spanning every combatant command from the Indo-Pacific to the Sahel, consuming energy at a scale comparable to entire industrial sectors of the domestic economy.

Break it down by fuel type and the picture sharpens further. The military burns something in the neighborhood of 4.6 billion gallons of liquid fuel annually — a figure that has held remarkably stable across administrations, wars, and drawdowns alike, because it is a function of platforms and posture, not politics. The overwhelming majority of that total is jet fuel: JP-8 for the Air Force and Army, JP-5 for Navy carrier decks, feeding a fleet of aircraft that measure fuel burn in gallons per mile the way the rest of us measure it in miles per gallon. But tucked inside that number are hundreds of millions of gallons of diesel and marine distillate — the fuel that moves an armored division across a training range, that keeps a destroyer’s auxiliary systems alive, that idles behind every forward operating base’s generator bank.

Then there’s the installations themselves — the roughly 800 major domestic and approximately 750 to 800 military sites overseas bases that don’t move, but still need to be lit, heated, cooled, and kept running around the clock. Installation electricity consumption runs somewhere between 30 and 34 terawatt-hours per year. For context, that’s more power than several G20 members’ civilian electricity sectors generate in total.

Add the fuel and the electricity together and you get a combined footprint of roughly 220 terawatt-hour-equivalents — about 0.75 quadrillion BTUs, or 0.75 “Quads” in the unit of measure energy analysts use when the numbers get too unwieldy for anything smaller. If the Pentagon operated as a sovereign nation and reported its own energy statistics, it would rank as one of the more energy-intensive economies on Earth — a fact borne out historically by a still-cited estimate from the height of the Iraq War: at the peak of that conflict, the Pentagon’s daily oil consumption alone would have ranked it 34th among the world’s nations, ahead of Pakistan’s entire population and just behind Iraq itself, the country in which much of that oil was being burned.

None of this is secret, exactly. It’s simply inconvenient to advertise, and convenient to leave for outside researchers to reconstruct from fragments — DLA fuel purchase records here, EIA cross-references there, congressional testimony sprinkled in between. The Pentagon does not report its consumption in a single consolidated public disclosure, and it has resisted doing so for years, citing operational security. That’s a defensible position. It is also, conveniently, one that keeps America’s single largest energy customer off the books that the rest of the world uses to understand global demand.

But there is another angle to the Pentagon’s energy posture that gets far less attention. It has to do with the slow, deliberate, multi-agency effort to wean the most fuel-intensive institution in the country off liquid hydrocarbons for its stationary load — and the fact that doing so happens to open a very useful door for a policy goal Washington has wanted to pursue for entirely separate reasons: rebuilding a domestic advanced nuclear industry that atrophied for two generations.

Executive Order 14299, “Deploying Advanced Nuclear Reactor Technologies for National Security,” set a hard deadline — September 30, 2028 — for fielding operational advanced reactor capability tied to national security missions. That is not a target arrived at by accident. It sits on top of a Nuclear Regulatory Commission licensing environment that has, in parallel, been streamlined through proposed NEPA reforms, alongside a concurrent ALARA rulemaking push and a stack of DOE advanced-reactor milestones — all converging on the same several-year window.

The Pentagon, in other words, doesn’t need to persuade anyone that it should buy nuclear power. It has a captive, unambiguous, apolitical justification sitting right there in its own energy bill: unreliable liquid-fuel logistics chains are a documented vulnerability in contested theaters. The Pentagon’s own term for the problem is the tyranny of fuel, coined after two decades of counterinsurgency in which moving diesel proved almost as dangerous as fighting itself. Route Irish, linking central Baghdad to the airport, earned its reputation as the most dangerous road in Iraq between 2003 and 2007 largely because of what traveled on it. A 2008 attack on a NATO supply depot near Peshawar destroyed thirteen fuel trucks outright; a 2010 strike on tankers staged near the Torkham border crossing took out more than thirty of them and killed or badly burned several drivers. Grid-tied installations carry a parallel vulnerability to cyberattack and blackout, and both problems are solved — or at least meaningfully mitigated — by parking a sealed, factory-fueled microreactor inside the wire. Nobody has to make the case for nuclear power on its own economic merits. National security does the persuading for you.

And once that door is open, the traffic through it doesn’t have to be limited to a handful of demonstration units on remote bases. It becomes the leading edge — the government-funded, risk-absorbing, first-mover customer — for an entire generation of advanced reactor vendors who have spent a decade struggling to get anyone to write the first check. A guaranteed federal anchor tenant is exactly the kind of de-risking event that turns a story stock into an investable industrial base, and turns an industrial base into IPO candidates.

Whether that’s the primary motive or a convenient second-order benefit is, admittedly, above this author’s pay grade to adjudicate with certainty. But it would be naive to assume the Pentagon’s nuclear buildout is purely a fuel-logistics play with no awareness of the industrial policy it doubles as.

None of this is happening in an institutional vacuum, for what it’s worth. The Army tried something similar once — eight remote reactors built between 1954 and 1977, at outposts as improbable as the ice tunnels of Camp Century and a converted Liberty ship moored in Panama’s Gatun Lake — before a fatal 1961 accident at an experimental reactor called SL-1, at the same Idaho site where Pele is tested today, ended in the only fatal reactor power-excursion accident in U.S. history and closed the book on military nuclear power for a generation. It stayed closed until a 2016 Defense Science Board report reopened the case, arguing small deployable reactors could do something diesel generators structurally can’t. Pele isn’t picking up a blank slate; it’s picking up a thread the Pentagon dropped fifty years ago for good reason, betting that better fuel forms and tighter safety margins have actually closed the gap this time.

With the framing established, let’s dig through the details of the project that’s actually doing the work.

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In 1976, Britain went to the IMF with its hand out. Inflation had run past 25%, the highest reading since the Napoleonic Wars. Sterling was in freefall, the government was borrowing at a pace no lender wanted to underwrite, and the country that had helped build the postwar order was reduced to accepting a $3.9 billion facility on terms that required real spending cuts and higher rates to get it. Britain was, at that point, the first advanced economy in the postwar era to require a bailout. Alongside Italy, it had earned the epithet “the sick man of Europe” — a diagnosis of decline so total that an entire genre of gloomy paperbacks, with titles like Is Britain Dying?, found a ready audience.

And then, almost providentially, the North Sea started paying out. First oil had come ashore in 1975; by 1978 and 1979 it was flowing in earnest, and by 1981 Britain had gone from importer to net exporter. James Callaghan, the Labour prime minister presiding over the IMF humiliation, called it “God’s gift to the British economy,” and for once a politician’s phrase undersold the reality. The basin didn’t just balance the books — it rewrote Britain’s entire economic trajectory. Oil went from roughly $3 a barrel in the early ‘70s to north of $37 by the mid-’80s, and Margaret Thatcher inherited a revenue stream large enough to fund tax cuts, break the unions, and privatize her way through a decade without ever quite having to answer for the bill.

That windfall didn’t just rebuild Britain’s economy — it rebuilt its confidence, and confidence is what the special relationship actually runs on. A Britain that had just gone begging to the IMF was not a Britain capable of standing shoulder to shoulder with Washington in any meaningful sense. A Britain suddenly flush with its own oil, run by a prime minister who could credibly claim the country was back on its feet, was exactly the kind of partner an American president could lean on. Reagan and Thatcher’s relationship was personal and ideological, but it was underwritten by the fact that Britain, for the first time in a generation, could show up to the alliance as a solvent power rather than a supplicant one. That backing proved decisive when it mattered most: when Argentina invaded the Falklands in 1982, Reagan’s Washington sided unambiguously with Britain, providing missiles, intelligence, and fuel that Thatcher’s own advisers later said was likely the difference between winning the war and losing the islands. Oil money bought Britain a prime minister strong enough to fight that war, and that prime minister’s closeness with an American president bought her the backing to win it.

It is worth noting what Britain chose to do with the windfall, if only because it explains the country’s current predicament. Norway, discovering oil in the same waters on the same timeline, nationalized the upside through Statoil — now Equinor — and built a sovereign wealth fund now worth roughly $2 trillion, larger than Saudi Arabia’s entire GDP. Britain farmed out licenses to the majors, privatized BP itself in the 1980s, and let the revenue flow straight through the exchequer into tax relief and a housing boom that ended, predictably, in the bust of 1990. Two nations, one continental shelf, and one of them has nothing to show for forty-seven billion barrels of extracted oil beyond having once not needed the IMF. The other has a fund worth one and a half percent of the value of every listed company on Earth.

Half a century later, the basin that rescued Callaghan’s government and underwrote Thatcher’s alliance with Reagan is being abandoned by the company whose name is practically synonymous with it. Meg O’Neill did not phrase it as a retreat. In April, on an earnings call that markets mostly shrugged off, BP’s new chief executive said the company had to ask itself a plain question: what assets might be worth more in someone else’s hands? Weeks later, Bloomberg reported what the question had been building toward — BP is weighing an exit from part or all of its UK North Sea operations, a divestment that could fetch upward of £2 billion. Reflecting on her first 100 days as CEO, O’Neill put the same logic in writing:

“We are taking concrete action to grow long-term value for shareholders: simplifying our portfolio, reducing costs, maintaining tight discipline on capex and strengthening the balance sheet, we need to be deliberate about where we invest and where we don’t. We need to make fewer, better choices and hold ourselves to account, investors should be able to rely on us in the same way our customers do,” the executive added, O’Neill, the first female CEO of a Big Oil company, wrote in a LinkedIn post to reflect on the first 100 days as top executive of BP.

The proximate cause is not mysterious. A combined tax rate near 78% on North Sea oil and gas profits has done what confiscatory tax rates reliably do: made the marginal barrel not worth the trouble. Chevron and ConocoPhillips got there years ago. What’s notable is that BP was the basin’s last major holdout, now conducting the kind of internal portfolio review that precedes a company quietly agreeing to stop being who it was. Its own $20 billion divestment target through 2027 isn’t a strategy slide. It’s a debt covenant with a deadline.

The North Sea is what Britain is leaving. Its other major hydrocarbon frontier is the one place where the exact opposite is happening. The UK government has banned new oil and gas licensing in its own waters — a stated climate policy, not a tax-driven half-measure. And yet 8,000 miles south, in the North Falkland Basin, a British company just took final investment decision on a field expected to produce 170 million barrels in its first phase alone, with a broader prospective resource estimated near 3.1 billion barrels next door. The reconciliation is a technicality: Falkland Islands hydrocarbon policy is devolved, so Westminster keeps its climate credibility at home while a self-governing territory of 3,600 people races ahead with exactly the kind of drilling the mainland has foreclosed on itself.

That territory has cost Britain more than money to hold, long before any of this oil was found. The UK spends roughly £150 million a year maintaining RAF Mount Pleasant and its garrison — permanent Typhoon fighters on quick-reaction alert, an air-defense battery, a rotating Army presence, the air bridge through Ascension Island. Spread across 3,600 residents, that’s about £42,000 in annual defense spending per Falkland Islander, equivalent to more than half the islands’ entire GDP, spent every year, in perpetuity, on deterrence alone — a higher ratio of military spending to GDP than any country on Earth, Ukraine included. That was the price of pure principle, justified by the 255 British dead of 1982 and the political impossibility of ever admitting the sacrifice might not be worth it anymore. A field now projected to pay the islands £5.6 billion in royalties over three decades doesn’t change why Britain defends the Falklands. But it means London no longer has to choose between principle and profit motive to justify the same £150 million a year — the oil arrived just in time to make expensive symbolism look like it was strategy all along.

Which brings the story to now, and to a very different kind of debt.

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Few countries have benefited more quietly from the return of Donald Trump to the White House than North Korea.

During Trump’s first term, “Little Rocket Man” dominated headlines as Washington and Pyongyang traded threats over North Korea’s growing nuclear arsenal. Today, by contrast, Kim Jong Un’s regime receives remarkably little attention despite expanding its strategic importance across multiple fronts.

North Korean troops have fought alongside Russian forces in Ukraine. Its factories have become a major source of artillery shells and munitions flowing into Russia’s war effort. Its uranium enrichment capacity is expanding through major new construction at the Yongbyon nuclear complex — the IAEA confirmed in April that a new building there, similar in scale to the Kangson enrichment facility, was externally complete with internal fitting underway, and in June Kim Jong Un personally toured a nuclear materials production facility, claiming output had “more than doubled” in five years. Meanwhile, trade between China and North Korea has rebounded sharply, with Beijing openly pledging deeper economic cooperation.

The regime’s finances tell the same story. Bank of Korea estimates put North Korean GDP growth at 3.1% in 2023 and 3.7% in 2024 — the fastest pace since 2016, and by the Wall Street Journal’s assessment, the strongest North Korean economy since Kim took power in 2011, arguably stronger than his father’s entire tenure. That outpaces most G7 economies over the same period. But the shape of the growth matters more than the headline number. Satellite nighttime-light data compiled by KAIST and the Max Planck Institute across 178 North Korean cities and counties shows illumination up 25.9% nationally between January 2022 and October 2025 — with almost the entire gain concentrated in 2022–2023, then flat since. The brightening tracks Pyongyang and military-industrial hubs specifically; it does not reach the countryside. And the timing lines up almost exactly with when South Korean intelligence assessed North Korea began supplying weapons to Russia. This isn’t broad-based development. It’s conflict cash, converted into visible capacity in a handful of favored cities, while the rest of the country stays dark. Russia needs ammunition. China needs industrial inputs. North Korea needs hard currency. Tungsten helps satisfy all three requirements simultaneously.

Known as the “war metal,” tungsten is essential for armor-piercing ammunition, missile systems, aircraft engines, semiconductor fabrication, machine tools, mining equipment, and countless defense applications. As global supplies tighten and prices surge — up roughly 500% since early 2025 by most benchmark measures — tungsten has emerged as one of the most strategically important minerals in the world.

The irony is that while Washington races to reduce dependence on China, some of the most important alternative supplies are emerging from countries deeply connected to Beijing’s sphere of influence.

China still controls more than 80% of global tungsten production and refining capacity. For years, that dominance appeared nearly absolute. Then an unusual problem emerged: dominance does not necessarily guarantee security. Export restrictions, environmental constraints, military demand, and tightening global supplies have created a situation where the world’s largest tungsten power increasingly finds itself searching for additional material. Reports of Chinese-linked buyers aggressively pursuing tungsten scrap in the United States — with some dealers offered up to five times normal prices, according to the Financial Times — have become common enough that American manufacturers, organized through a coalition led by AMERMIN, have petitioned the Department of Commerce for export controls on scrap shipments bound for China and Russia.

“We’ve got to stop the export back to China,” said Ryan McAdams, chief executive of Texas-based recycler Amermin. “This is a secret war that nobody’s talking about.”

The world’s dominant supplier has quietly become one of the world’s most determined buyers. This has transformed an obscure industrial metal into the latest front in the global resource competition between Washington and Beijing. Let’s pierce through the amor and see what’s underneath.

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There is an old trader's axiom worth remembering: the market doesn't panic about the thing that's happening, it panics about the thing it can't measure. Strategic petroleum reserves fall squarely into that second category. Governments publish GDP, inflation, and defense budgets because concealing them buys little. Reserves are different. A reserve figure tells an adversary how long you can bleed before politics changes. Which is exactly why Beijing has never published one, and why an entire cottage industry of satellite imagery, AIS tracking, and customs-declaration modeling exists to reconstruct what China refuses to disclose. Reuters has repeatedly noted that analysts are forced to infer Chinese inventory movements rather than observe them directly. The models have gotten sophisticated. They remain, by definition, guesses.

That opacity turned the recent Iran War into the most interesting economics experiment nobody asked for. China entered the conflict as the planet's largest crude importer, buying north of 11 million barrels a day, roughly half of it transiting the Persian Gulf. When The United States and Israel started rattling the cage around the Strait of Hormuz — a chokepoint carrying close to a fifth of the world's oil — the models all pointed the same direction. Remove several million barrels a day of Gulf supply, and the world's largest manufacturing economy should have felt it within weeks. Wall Street revised $150 oil calls to $200. War-risk insurance on Gulf tankers went vertical.

It didn't come. And more strangely, China — the country everyone question if it would buckle first — barely flinched. Ports stayed open. Factories kept running. No queues at the pump.

Give credit where it's due: Doomberg flagged this anomaly in real time, in Flex Capacitor, while most of the commentariat was still arguing about whether prices were being manipulated. The piece's central data point is worth restating: a Reuters report revised the estimate of lost Gulf exports from an initial back-of-envelope 12–15 million barrels a day down to something closer to 5–6 million, once traders and shippers accounted for rerouted cargoes and sanctioned barrels still finding buyers. That revision, more than any narrative about strategic patience, explains why WTI never got near $150, let alone $200. Doomberg's broader argument — that China had, almost invisibly, built a kind of shock absorber for the global hydrocarbon system, insulating not just itself but everyone downstream of it — is well evidenced and worth taking seriously.

The architecture behind that shock absorber is real, and it didn't appear overnight. China today runs roughly 19 million barrels a day of refining capacity — the largest system on earth, and one that has puzzled Western analysts for years because it operates below optimal utilization with compressed margins. Viewed as a commercial decision, that's inefficient. Viewed as a national-security decision, it's optionality: crude can be redirected between facilities, maintenance deferred, regional disruptions absorbed elsewhere in the system. Storage tells the same story. Independent estimates place combined strategic and commercial inventories somewhere between 900 million and well over a billion barrels — the number is unknowable by design, but the direction of travel (accumulation, for years, while outsiders debated whether Beijing was overdoing it) is not in dispute. For context, that's roughly the same ballpark as total US inventory across every category combined — SPR, commercial crude, and refined products together — even though the American figure is fully disclosed weekly, or subjected to civil penalties, and the Chinese one is satellite-imagery guesswork. Both governments, as it happens, were quietly drawing down their own reserves during the same war for very different reasons: Washington to cap prices via a loaned-out, IEA-coordinated SPR release that leaves the barrels as a receivable rather than a permanent loss, Beijing to manage a war it may not have needed to manage as urgently as it appeared.

Nor did Beijing stop at oil. China mined roughly 4.8 billion metric tons of coal last year — more than the rest of the world combined — and coal still supplies about 60% of Chinese electricity. Coal can't be interdicted by a foreign navy; every domestically-mined electron is one less barrel of imported fuel needed to keep a factory running during a crisis. Overland pipelines — Power of Siberia from Russia, connections through Kazakhstan and Central Asia, the Myanmar-to-Kunming crude line that lets Gulf and African oil bypass the Strait of Malacca entirely — have spent two decades quietly diluting maritime dependence without ever eliminating it. More than 60 nuclear reactors, with dozens more under construction, convert a fuel that can be stockpiled for years into baseload electricity that doesn't need a tanker. Add 48,000-plus kilometers of high-speed rail displacing car and short-haul air travel, plus an EV fleet that now accounts for well over half the global total, and you have two decades of policy that — whatever else it was for — has the cumulative effect of shrinking the amount of imported crude China needs to keep functioning.

That is a genuinely impressive list. It is also, on its own, an incomplete explanation.

Longtime readers know where the chokepoint framework in this newsletter comes from. In Choke Collar, the case was laid out for how Washington has spent the better part of a decade tightening its grip on the sea lanes and resource geography ringing China — deepening military access across Indonesia, the Philippines, Australia, and Japan, with Indonesia's Grasberg-anchored resource base as one node in a broader campaign toward escalation dominance. The Malacca Dilemma — Hu Jintao's 2003 warning that nearly 80% of China's seaborne crude has to funnel through one strait — has been the load-bearing assumption underneath that entire strategy: control the chokepoint, control the leverage.

The Iran War was, in effect, a live-fire test of that assumption. And the test result, on its face, favors Beijing. Whatever combination of reserves, refining flex, coal, pipelines, and electrification China had assembled, it proved sufficient to absorb the largest disruption to Gulf energy flows in decades without producing visible economic dislocation. If that holds up, the Malacca Dilemma isn't dead — 60% of Chinese crude imports and a large share of its LNG still arrive by sea, and the US Navy hasn't lost the ability to contest those lanes in a prolonged conflict — but its coercive value looks smaller than two decades of strategic planning assumed.

Here's the uncomfortable question underneath that conclusion, though: is the Malacca Dilemma being solved, or is the size of the dilemma simply shrinking for reasons that have very little to do with strategy?

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Since Donald Trump’s return to the White House, a broad consensus has emerged regarding American foreign policy, reinforced by the administration’s National Defense Strategy and its senior cabinet appointments. Friends and critics alike have reached much the same conclusion: the United States is abandoning the international order it painstakingly constructed after the Second World War. Washington has questioned NATO, withdrawn from international agreements, criticized the United Nations, the World Health Organization, UNESCO, and a growing list of multilateral institutions that once stood as pillars of American global leadership. Tariffs have increasingly replaced free trade. “America First” has supplanted globalization as the guiding principle of American statecraft. To many observers, the postwar order is no longer being managed—it is being dismantled.

The United States’ actions, however, have thus far provided evidence to the contrary.

Yet no institution has found itself more frequently in President Trump’s crosshairs—save perhaps NATO—than the United Nations. His administration has withdrawn from dozens of UN-affiliated organizations, suspended participation in others, withheld more than $1.5 billion in assessed contributions, sought sweeping reductions in peacekeeping and voluntary funding, instructed American diplomats to challenge ideological language embedded throughout the UN system, and repeatedly questioned whether American taxpayers should continue underwriting organizations that, in Washington’s view, had drifted far beyond their founding purpose. The criticism has been every bit as direct as the policy.

“What is the purpose of the United Nations? All they seem to do is write a really strongly worded letter and then never follow that letter up. It’s empty words and empty words don’t solve war.”

— Donald Trump

To most observers, the message appeared unmistakable. Washington was preparing to walk away from one of the principal institutions of the postwar order.

One of the more overlooked aspects of the conflict with Iran is that America’s re-engagement with the international community occurred while the United States and Israel were still conducting military operations. As aircraft struck Iranian facilities and military planners focused on degrading Tehran’s strategic capabilities, American diplomats were simultaneously taking the Iran file to New York. The administration sought to restore United Nations sanctions through the snapback mechanism, preserve international restrictions on Iranian arms transfers, strengthen the role of the International Atomic Energy Agency, rally diplomatic support for continued inspections, and transform what had largely been an American maximum-pressure campaign into one carrying the legal and political weight of the international system. It was not simply about military force. It was about persuading the rest of the world to participate in the peace that would follow.

The irony is difficult to ignore. Trump’s dispute was never with international institutions themselves. It was with international institutions that had, in Washington’s view, drifted beyond their original purpose. His administration proved perfectly willing to withdraw from, defund, or discipline agencies increasingly devoted to climate policy, migration, gender initiatives, development ideology, and bureaucratic mission creep. Yet when the issue returned to the United Nations’ founding mission—maintaining international peace and security, enforcing sanctions, verifying nuclear compliance, coordinating maritime security, and upholding the sovereignty of nation-states—the same administration proved equally willing to employ the institution as an instrument of American statecraft. Taken a panoramic view, Washington’s behavior ceases to appear contradictory. The objective was never to abandon the international order. It was to restore those parts of it that continued to generate strategic value for the United States.

To the chagrin of those who insisted there was no plan, one appears to have been quietly taking shape all along.

Within days of the memorandum of understanding, the United Nations quietly entered the implementation phase of the settlement through one of its specialized agencies. The International Maritime Organization announced a coordinated operation to evacuate hundreds of merchant vessels carrying approximately 11,000 stranded seafarers, an undertaking requiring governments, naval forces, insurers, port authorities, and the global shipping industry to move in concert. Individual transit windows were established, temporary navigation routes were organized, and commercial traffic began the slow process of returning to one of the world’s most strategically important waterways.

“This large-scale operation will be carried out in close cooperation with Iran, Oman, all other coastal States in the region, the United States and the maritime industry.”

— IMO Secretary-General Arsenio Dominguez

The significance of that statement extends well beyond commercial shipping. For the first time since the memorandum was signed, the United Nations was no longer observing events from the sidelines. It had become part of the implementation. The institution many believed President Trump had spent months attempting to marginalize was now coordinating one of the first multinational operations necessary to transform a military victory into a functioning peace.

That should not be dismissed as bureaucratic coincidence. It is evidence that the United Nations has already begun assuming a more actionable role in the postwar settlement. Washington did not create a new institution to coordinate the reopening of the Strait of Hormuz. It reached for one that already existed.

If this represents the first operational responsibility assigned to the United Nations following the memorandum, it is reasonable to ask what responsibilities may follow. That question becomes considerably more consequential when viewed alongside another development receiving remarkably little attention: the United Nations itself is preparing for a change in leadership.

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On March 19, 2011, American and allied forces launched Operation Odyssey Dawn against Libya. Over the following months, hundreds of aircraft, cruise missiles, intelligence assets, and NATO airpower systematically dismantled Muammar Gaddafi’s military while rebel forces advanced across the country. By October, Gaddafi was dead, his government had collapsed, and the regime that had ruled Libya for more than four decades ceased to exist.

The operation remains one of the more uncomfortable episodes in modern military history because it challenges a long-standing assumption held by many strategists: that air power alone rarely produces decisive political outcomes. Strategic bombing can destroy infrastructure, cripple military formations, and impose enormous economic costs, but it generally struggles to compel governments to surrender. Libya appeared to be an exception. A color revolution was already underway. Rebel forces supplied the boots on the ground NATO was unwilling to deploy itself. International sanctions isolated the regime. Financial pressure restricted its options. Air power supplied the hammer while local actors provided the anvil. Together they created a perfect storm that transformed a bombing campaign into regime collapse.

Who said bombing could not achieve capitulation?

"You can bomb the world into pieces, but you can't bomb it into peace." — Barbara Tuchman (Historian, writer, 1912 – 1989)

Libya demonstrated what can happen when airpower, sanctions, financial pressure, and internal opposition align in the same direction. Against that backdrop, the opening phases of the Iran War begin to look less like a nebulous aperture into foreign affairs and more like an attempt to replicate a framework first tested over the skies of North Africa. The objective was never a large-scale invasion. The United States showed little appetite for another Iraq and even less interest in nation-building. Instead, the early contours of the campaign bore a familiar shape: economic isolation, financial pressure, overwhelming airpower, and the expectation that internal fractures would eventually provide the political force necessary to finish the job.

While the Iran War has not followed the same script, an interesting development has occurred. The signing and attempted implementation of a memorandum of understanding between Washington and Tehran has introduced a new variable into the conflict. After months spent manipulating oil markets through presidential tweets and Truth Social Post, it appears détente has been chosen as the path of least resistance.

When discussing the MOU, the arrangement appears strangely one-sided. Iran receives investment, reconstruction, and reintegration. At the center of the framework reportedly sits a private investment vehicle worth as much as $300 billion. For perspective, Iran’s economy generated roughly $400 billion in annual GDP before the war, while its oil and natural gas resources are often valued at more than $10 trillion. Viewed through that lens, $300 billion begins to look like a pittance to pay for access to one of the world’s largest undeveloped energy prizes and the opportunity to reliquefy a global energy market that spent months bracing for an annus horribilis. If implemented, the initiative would rank among the largest reconstruction and investment programs ever attempted in the modern Middle East.

So let’s see what’s the understanding?

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In the summer of 1865, a state geologist named Henry H. Eames was dispatched into the wilderness of northeastern Minnesota to investigate rumors of iron-bearing rock. The region was largely unmapped, sparsely populated, and considered far removed from the centers of American commerce. Vast forests stretched across the landscape. Wolves outnumbered settlers. The Civil War had only recently ended, and the nation’s attention remained fixed on rebuilding a fractured republic rather than exploring its distant northern frontier.

Eames returned with samples that would help launch one of the greatest mining regions in American history.

Over the following decades, prospectors, surveyors, and mining companies pushed deeper into Minnesota’s interior. What they discovered transformed the state and, eventually, the nation. The Vermilion Range, followed by the Mesabi and Cuyuna ranges, contained extraordinary concentrations of iron ore deposited nearly two billion years earlier when much of North America lay beneath an ancient sea.

The timing could not have been better. America was entering the age of steel. Railroads stretched westward across the continent. Cities climbed toward the sky. Factories multiplied. Bridges, ships, locomotives, and industrial machinery consumed unimaginable quantities of metal. Minnesota supplied the raw material that made much of it possible.

By the early twentieth century, The Iron Range had become one of the most important mineral districts on Earth. Ore trains departed the mines in endless succession. Great Lakes freighters carried Minnesota iron to steel mills from Duluth to Pittsburgh. The region helped build the industrial foundations of American power, providing the material that armed Allied forces during two world wars and supported the manufacturing boom that followed.

For generations, the geology of northern Minnesota was viewed through a single lens. The Iron Range existed to produce iron. Everything else was secondary. Geologists searched for additional ore bodies. Mining companies chased copper, nickel, platinum group metals, and other mineral deposits hidden beneath the ancient rock formations. The assumption was simple: the value of the region lay in the metals locked inside the ground.

It turns out the rocks may have been hiding another secret entirely.

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China’s ascent to the summit of the electric vehicle industry ranks among the most astonishing industrial achievements of the modern era. Rarely in economic history has a nation moved from peripheral player to undisputed champion with such speed. Of the roughly 74 million electric vehicles currently operating worldwide, nearly 44 million reside on Chinese roads. More remarkably, China is simultaneously the world’s largest EV market and its dominant manufacturer, responsible for approximately 73% of global production.

Yet even these figures understate the scale of the phenomenon. Expand the definition of electrified transport to include scooters, mopeds, and e-bikes, and the numbers become almost absurd—China alone hosts roughly 444 million such vehicles. For perspective, total global motor vehicle production of all types hovers around 92 million vehicles per year. China contributes approximately 34 million of those units, while the United States, in a distant second place, manufactures roughly 10 million. All praise the Church of Carbon; its most devoted disciple may well have become its greatest disruptor—pun intended.

What may surprise casual passanger is that China never achieved comparable dominance in the internal combustion engine (ICE) era. This was not for lack of ambition. Rather, it was a lesson in the unforgiving power of the unyielding laws of physics and institutional compounding. Companies such as Toyota and Mercedes-Benz spent more than a century refining the dark arts of thermodynamics, metallurgy, combustion control, and transmission engineering. The resulting moat consisted not merely of patents, but of institutional knowledge layered upon institutional knowledge—millions of engineering decisions compounded over generations.

Beijing attempted to shortcut the process through joint-venture requirements, compelling foreign automakers to partner with domestic firms. The strategy succeeded in attracting factories and creating employment, but largely failed to transfer the crown jewels. Foreign manufacturers guarded their most valuable intellectual property with religious zeal, while many domestic firms became comfortable collecting profits behind protected market walls rather than mastering the brutal realities of engine development. Building a world-class internal combustion engine is not unlike learning to play concert piano; observing the performance is not the same as acquiring the skill.

The complexity of the legacy automotive supply chain further reinforced incumbent advantages. It is often estimated that a vehicle assembled in North America sees components cross international borders half a dozen times before final assembly. Such deeply integrated ecosystems cannot simply be decreed into existence.

Recognizing they were playing a game whose rules had been written by others a century earlier, Chinese policymakers made a remarkably pragmatic decision: they changed the game entirely.

Rather than continue chasing Western and Japanese manufacturers around the combustion racetrack, Beijing redirected vast amounts of capital toward electric vehicles. In doing so, it shifted the basis of competition away from crankshafts, pistons, and transmissions and toward batteries, power electronics, software, and supply-chain orchestration. A contest in which China was decades behind became one in which the starting gun had only recently fired. Through subsidies, industrial planning, and relentless scale, China effectively compressed a century of automotive catch-up into a single generation.

Yet even this explanation misses a crucial chapter in the story.

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“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”— Niccolò Machiavelli

Every Pax era is ultimately an energy story. Historians remember emperors, admirals, treaties, and wars. Markets remember grain, coal, oil, and the infrastructure required to move them.

The term Pax Romana was popularized by Edward Gibbon to describe the roughly two centuries during which Rome imposed order across the Mediterranean world through military supremacy, legal standardization, and infrastructure. Roman roads did not merely move armies. They moved grain from Egypt, taxes from the provinces, and authority from the capital. Rome’s greatest strategic asset was not the legion. It was its ability to organize economic activity across vast distances.

Nearly two millennia later, Joseph Chamberlain coined the phrase Pax Britannica to describe the order maintained by the British Empire. At its peak Britain controlled roughly a quarter of the world’s landmass and population. The Royal Navy protected maritime commerce while British coal, steel, insurance, and finance underwrote industrial capitalism itself. The empire’s true weapon however, was not the battleship, it was the steam engine and the fuel that powered it.

Pax Americana emerged from the wreckage of the Second World War when the United States inherited nearly half of global industrial production. Bretton Woods anchored trade to the dollar while American naval power secured hydrocarbon flows from the Persian Gulf to the Pacific. Oil became the bloodstream of modernity. In 1945 the world consumed roughly six million barrels of oil per day. Today it consumes more than one hundred million. NATO, containerized trade, petrodollar recycling, globalization, and much of the postwar order rested atop abundant hydrocarbons and the institutions that protected them.

Every era eventually discovers that its most valuable resource is not always the one people expected. The emerging age appears to be organizing itself around compute, and compute has proven far more physical than most people assumed.

Artificial intelligence is frequently discussed as though it were a software industry. Yet beneath the headlines sits a simpler reality. Artificial intelligence converts is an energy story. Every prompt begins as electrons moving through a processor. Every frontier model is trained inside facilities consuming extraordinary quantities of power. Every national AI strategy eventually collides with the same question: where will the energy come from?

The answer is becoming increasingly expensive. The International Energy Agency expects data-center electricity demand to more than double before the end of the decade, surpassing 1,000 terawatt-hours annually. The largest AI campuses under development today require power measured in gigawatts rather than megawatts. A single facility can demand electricity equivalent to a medium-sized city. Microsoft, Google, Amazon, Meta, and OpenAI are increasingly competing not only for engineers and semiconductor capacity but for power generation itself. Nuclear power agreements, natural-gas contracts, transmission access, and utility relationships are becoming competitive advantages.

The semiconductor industry is remarkably concentrated. The Netherlands produces the only extreme ultraviolet lithography machines capable of manufacturing leading-edge semiconductors. South Korea dominates high-bandwidth memory. NVIDIA dominates advanced AI processors. China controls roughly 98 percent of global gallium production, while Taiwan manufactures approximately 90 percent of the world's leading-edge semiconductors. The semiconductor shortages that followed Covid transformed these concentrations from a commercial concern into a national-security concern. Washington's answer arrived in late 2025 under a name that initially sounded like another policy initiative: Pax Silica.

“If the 20th century ran on oil and steel, the 21st century runs on compute and the minerals that feed it. This historic declaration hails a new economic security consensus ensuring aligned partners build the AI ecosystem of tomorrow—from energy and critical minerals to high-end manufacturing and models.” Under Secretary of State Jacob Helberg

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Longtime readers of The Monetary Skeptic will recognize that we have spent the better part of the past year circling around a single geographic reality hiding underneath sanctions, energy markets, and the growing fragmentation of the global economy: the Eurasian interior is becoming strategically important again. From Russia’s inland river network and Kazakhstan’s role in sanctions circumvention to the growing contest over Caucasus trade corridors, the same theme keeps resurfacing. The world built by maritime empires is slowly colliding with a world increasingly organized around railways, pipelines, inland logistics, and industrial corridors stretching across the heart of Eurasia.

What may come as a surprise to most is realizing that two of the most sanctioned countries in the world, Russia and Iran, share the basin. In fact, the Caspian is one of the very few regions on Earth where the United States lacks meaningful power projection. The 2018 Convention on the Legal Status of the Caspian Sea—replacing earlier Soviet-Iranian agreements—established a unique legal framework that deliberately avoided classifying the basin as either a sea or a lake. More importantly, the agreement restricted the deployment of non-littoral military forces, effectively reserving security and navigation rights to the five coastal states alone. What once appeared to be an obscure regional agreement now looks increasingly prescient.

As Wall Street Journal recently observed:

“The Caspian as sitting effectively beyond the operational reach of the U.S. Navy, allowing Russia and Iran to move weapons, drones, wheat, oil, and industrial cargo across a protected inland corridor linking the two sanctioned powers. The report noted that the basin has become especially important for the transfer and co-production of Iranian Shahed drones, transforming the Caspian from a regional commercial sea into a critical military and logistical rear area connecting Moscow and Tehran.”

This avoidance of the Eye of Sauron intensified dramatically after sanctions hit Russia in 2022. Many observers assume Iran’s economy survived decades of pressure because it was structurally built for privation. The reality is more nuance. Iran increasingly benefited from a loophole the United States either could not or would not fully close.

In August 2023, Foreign Policy described the Caspian as a “sanctions-busting paradise” where Russian and Iranian vessels increasingly operated beyond much of the traditional scrutiny governing global maritime trade. The report documented more than 600 AIS transmission gaps by Russian-flagged vessels across a three-month period, up from just over 100 during the same stretch a year earlier. Russian and Iranian ships regularly conducted dark port calls with transponders disabled while other vessels spoofed their locations entirely. On one observed day alone, twelve Russian and Iranian vessels moving across the Caspian reportedly conducted dark port calls while another twelve engaged in ship-to-ship transfers designed to obscure cargo movements.

Cargo entering Iranian Caspian ports could move southward into Iran’s domestic economy or eastward through the broader Eurasian interior toward China. Russian grain, oil products, industrial components, drone technology, and sanctioned goods increasingly flowed through a partially protected inland corridor sitting far beyond the direct reach of traditional American maritime leverage. Bilateral trade between Russia and Iran surged from roughly $1.6 billion in 2019 to more than $4 billion by 2024 while broader Russia-China trade climbed toward $240 billion annually. The Caspian increasingly functioned less as a regional sea and more as connective tissue linking sanctioned economies into a larger Eurasian commercial system.

On May 17, 2026, Ukrainian unmanned systems reportedly struck a Russian Project 10410 Svetlyak-class patrol vessel near Kaspiysk in Dagestan. The attack suggested that a basin once viewed as geographically insulated and strategically untouchable might no longer sit outside the widening map of Eurasian conflict.

Recent Israeli operations appear to reinforce the same realization.

As Israel expanded its campaign against Iranian logistics and weapons infrastructure, reporting increasingly pointed toward supply corridors and military networks connected to the Caspian basin itself. A region once viewed as insulated from the pressures shaping the Persian Gulf and Eastern Mediterranean increasingly appears tied to the same widening conflict architecture.

Being a real-estate guy—pun intended—President Trump’s answer to perhaps the last major sanctuary beyond the reach of American influence appears to be a strategically placed piece of land with his name attached to it.

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In Greek mythology, Hercules stood at the edge of the known world and split a mountain in two. The rupture formed the narrow passage now known as the Strait of Gibraltar, flanked by the Pillars of Hercules, the gateway between the Atlantic Ocean and the Mediterranean Sea. Mythology explained symbolically what empires would later learn materially: whoever controlled the pillars controlled passage between worlds.

The Phoenicians understood it. Carthage fortified it. Rome guarded it. In 711, the Umayyads crossed it to conquer Iberia itself. The Spanish Empire later used the corridor to shield the silver arteries flowing from the Americas into Europe. Then came Britain.

In 1704, during the War of the Spanish Succession, an Anglo-Dutch fleet seized Gibraltar from Spain. The Treaty of Utrecht formally transferred control to Britain in 1713, creating one of the most strategically valuable footholds in modern imperial history. From that rock, the Royal Navy could observe every vessel entering or leaving the Mediterranean. During the Napoleonic Wars, Gibraltar became an anchor of British maritime supremacy. During World War II, it served as a submarine and convoy base critical to operations across North Africa and the Atlantic. The Rock was never merely territory. It was leverage positioned at the hinge point between oceans.

The Strait of Gibraltar remains one of the most important maritime corridors in the world. More than 120,000 vessels transit the passage annually, linking the Atlantic economy to a Mediterranean system carrying nearly 20% of global seaborne trade. Every container ship moving from Asia toward Europe through the Suez system must eventually pass Gibraltar before entering the Atlantic economy. More than 5 million barrels per day of crude oil and refined products move through the corridor connecting Mediterranean energy systems to Atlantic markets. Geography concentrated commerce into a narrow corridor, and concentrated commerce eventually becomes concentrated power.

And now the United States is quietly moving into position around it.

On May 10, 2026, the United States publicly deployed the Ohio-class ballistic missile submarine USS Alaska through the Strait of Gibraltar in one of the rare visible movements of an operational nuclear deterrent platform. The transit occurred under heavy security near Gibraltar’s South Mole, reinforced by Royal Marines exclusion measures and extensive maritime controls. Normally, Ohio-class submarines are designed never to be seen. They represent the stealthiest and most survivable leg of the American nuclear triad, carrying up to 20 Trident II D5 ballistic missiles capable of delivering overwhelming retaliatory force. Their strategic value comes precisely from uncertainty surrounding their location.

Which is why the transit was intended to send a message.

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The perceived misconception—if one were to judge by the flood of announcements coming from Washington, the Department of Energy, the Department of Commerce, and every adjacent alphabet agency—is that the United States is entering a great nuclear construction renaissance. Media headlines imply the return of the atom. Investors speak as though the concrete is already curing. Politicians talk as if reactors are about to rise across the continent the way Liberty Ships once slid down American dry docks during the Second World War. That is not what is happening. What the United States is actually experiencing is a renaissance in nuclear regulation.

America is not yet rebuilding the industrial machinery required for rapid, repeatable, mass-scale nuclear deployment. What Washington is rebuilding first is the legal and regulatory architecture necessary for such a deployment to become possible at all. The United States is simplifying licensing pathways, consolidating reactor approvals, standardizing reference designs, accelerating environmental reviews, and restructuring financing channels around a smaller set of technologies. The effort underway is less a construction boom than a political and institutional attempt to create the conditions under which one could eventually occur.

Ironically, the last true American nuclear buildout emerged from another energy crisis involving two of the same countries now sitting at the center of geopolitical tension: the United States and Iran. The oil shocks of the 1970s forced Washington into a strategic reappraisal of its energy system. At the time, oil was still burned in large quantities inside power plants. American electricity generation remained directly exposed to crude markets in a way that now feels almost alien. When the Iranian Revolution and the second oil shock detonated across the global economy, the United States responded not merely with diplomacy or military posture, but with infrastructure. Nuclear construction accelerated because policymakers feared hydrocarbons themselves were becoming unreliable. Hubbert’s Peak hovered over the period like scripture. Energy scarcity was treated as inevitable. The solution became diversification through atomic power.

Today the conditions are almost inverted. The United States is awash in hydrocarbons. It is the world’s largest combined producer of oil and natural gas. Its economic system is far less sensitive to crude price shocks than it was during the Carter era. Combined-cycle gas turbines remain extraordinarily cheap to deploy relative to nuclear facilities. The economic pressure that forced utilities into atomic construction fifty years ago does not presently exist in the same form.

Which is precisely what makes the current regulatory push so interesting.

Unlike China—which has developed a highly standardized, state-directed nuclear construction model capable of deploying reactors at industrial speed—the United States still lacks a comparable buildout machine. China builds reactors the way modern industrial powers build container ships or high-speed rail. Designs are standardized. Supply chains are vertically coordinated. Financing flows through state-controlled channels. Construction teams move from project to project with accumulated institutional memory intact. Delays still occur, but the broader architecture is optimized around repetition.

The United States does almost the opposite.

American nuclear construction remains dominated by custom-built, large-scale projects assembled through fragmented regulatory, financial, and contractor ecosystems that historically produce delay, cost overruns, redesign disputes, and political risk. Every reactor becomes partially bespoke. Every licensing cycle turns into a legal negotiation. Supply chains remain thin. Skilled labor pools disappear between projects. Components are sourced through industrial networks that have spent decades shrinking rather than scaling.

Plant Vogtle became the symbol of this dysfunction. Instead of serving as the triumphant rebirth of American nuclear power, Vogtle became a case study in why the United States lost the ability to build large reactors efficiently in the first place. Costs exploded. Timelines stretched. Contractors collapsed. What was supposed to demonstrate capability instead exposed institutional atrophy.

And yet, paradoxically, Vogtle may ultimately become the foundation upon which a future American nuclear expansion is built.

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In 2010, China discovered something the rest of the industrial world had forgotten: a country does not need to dominate the finished product if it controls the material buried underneath it. A territorial dispute near the Senkaku Islands escalated into something much larger when Beijing quietly restricted rare-earth exports to Japan. No missiles flew. No ports closed. Yet electronics manufacturers, defense contractors, and industrial planners across the developed world suddenly found themselves staring at the same uncomfortable reality: the magnets inside the motor, the guidance package, and the wind turbine all ran through China first. The modern industrial economy had outsourced a strategic layer of itself to a geopolitical rival.

At the time, China controlled roughly 95% of global rare-earth refining and separation capacity. Fifteen years later, Beijing still controls around 70% of rare-earth mining, roughly 85–90% of refining, and close to 90% of permanent-magnet production. Readers of this publication already understand the list: F-35s, precision weapons, radar systems, semiconductors, EV drivetrains, robotics, permanent magnets. By 2010, one reality sat underneath all of them: the industrial world had quietly rebuilt itself around Chinese refining capacity.

Washington spent much of the following decade pretending this was mainly a trade problem. It was not. It was a sovereignty problem in drag. That realization now hangs over the next Trump–Xi meeting like cigar smoke in a backroom negotiation. The headlines will focus on tariffs, semiconductors, and export restrictions. The real discussion sits further down the chain, where ore becomes metal and metal becomes leverage. The United States enters this round in a materially stronger position than it occupied fifteen years ago, not because it rebuilt the entire rare-earth sector overnight, but because it finally started using the balance sheet of the state the way other great powers already do.

The quiet center of that shift is Steve Feinberg. Most Americans have never heard of him. Feinberg made his fortune buying distressed assets and navigating political timing, which turns out to be unusually good preparation for industrial policy during an era of geopolitical fragmentation. As Deputy Secretary of Defense, he now sits near the center of a sprawling effort—a $1.5 trillion defense budget that treats critical minerals less like commodities and more like industrial terrain. The Pentagon used to buy weapons sitting at the end of the supply chain. It is increasingly trying to shape the chain itself.

In February 2026, the Department of Defense formally launched Feinberg’s Economic Defense Unit, an internal apparatus designed to pull procurement, financing, export controls, grants, and equity stakes into the same orbit. Washington would never publicly describe this arrangement as a sovereign wealth fund because Americans associate that language with Gulf monarchies or Chinese state capitalism.

Washington may reject the label, but as the United States moves further down its own path of statecraft capitalism, it is worth taking inventory of the results. Let’s being grading the returns

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In the highlands of Papua, Indonesia, one of the most consequential mining operations in the world sits atop a vast copper and gold system: the Grasberg mine. Its significance extends beyond geology. From its earliest development, Grasberg has reflected the alignment of state power, capital, and access, shaped as much by geopolitical circumstance as by the ore body itself.

Dutch geologists first identified copper mineralization in the region in the 1930s, but the deposit remained largely undeveloped through war and decolonization. It was not until the late 1960s, under Suharto’s government, that a U.S.-backed consortium secured rights to develop the Ertsberg deposit, establishing what would become Freeport-McMoRan’s long-standing presence in the region. By 1988, exploration confirmed reserves exceeding 30 billion pounds of copper and tens of millions of ounces of gold, placing Grasberg among the largest combined copper and gold systems ever brought into production and anchoring a relationship between Indonesian sovereignty and American industrial involvement that persists today.

That relationship is visible not only in ownership but in output and market impact. Grasberg has historically accounted for roughly 3 to 4 percent of global copper supply, producing between 700,000 and 800,000 tonnes annually in peak years, alongside a comparable share of global gold output. Even after Indonesia consolidated control in 2018, securing a 51.24 percent stake through its state holding company while Freeport-McMoRan retained 48.76 percent, the mine remained embedded in a pricing, financing, and demand structure in which American firms and markets continue to play a defining role. Recent disruptions reinforce that scale. The 2025 force majeure tied to tailings constraints is expected to remove roughly 591,000 tonnes of copper supply through 2026, tightening a market already facing structural deficits driven by electrification, grid expansion, and defense demand.

Grasberg is not an isolated asset. It sits within a broader Indonesian resource base that has become central to global industrial supply. Indonesia holds the world’s largest nickel reserves and has expanded production to more than 2 million tonnes annually, accounting for roughly 55 to 60 percent of global mined supply. The country also produces close to 30 percent of the world’s tin, exports more than 500 million tonnes of coal per year, and maintains a growing role in LNG and regional gas flows. This concentration of resources has transformed the archipelago into one of the few places where energy, metals, and industrial inputs converge at scale.

Let’s dig and see what’s been brought up to the surface.

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The idea of charging for passage is as old as empire itself. From the canals of ancient Mesopotamia to the fortified crossings of the Roman world, great powers have long understood a simple truth: control the corridor, and you can tax the system. In medieval Europe, tolls along the Rhine funded entire political orders. In the 20th century, the Suez Canal became a lever so powerful it could trigger war. Geography matters, but what endures is the ability to price access.

That history echoed forward in April 2026, when conflict with Iran reignited a familiar question: who controls the world’s most critical energy artery, and who gets paid for it?

As tensions escalated following Iran’s disruption of traffic through the Strait of Hormuz, Donald Trump floated a blunt idea: if anyone is going to impose costs on global shipping through Hormuz, it should be the United States—not Iran. The implication was straightforward. Authority over the strait should go hand in hand with the right to collect the toll. If the U.S. Fifth Fleet guarantees freedom of navigation, why shouldn’t it capture the economic upside?

That framing—tolls not merely as revenue but as an instrument of power—provides the bridge to a more sophisticated mechanism: dollar swap lines.

A swap line is a contractually bounded currency exchange in which a foreign central bank deposits its own currency with the Federal Reserve or the U.S. Treasury and receives dollars, with a binding obligation to reverse the transaction at the same exchange rate on a future date, plus interest. The United States holds the foreign currency as collateral, and counterparty risk sits at the central bank level. The structure is conservative enough that Federal Reserve swap operations—peaking near $585 billion in 2008 and $450 billion in 2020—produced no documented losses across the major crises examined in the literature. These are priced instruments, not charity. In practical terms, they are tolls for access to the world’s most important financial infrastructure.

The United States has used this system before, and with notable success. During the 2008 crisis and the 2020 pandemic shock, swap lines absorbed global dollar-funding stress while generating income. The foreign partner pays for the service; the United States collects the spread. The U.S. is not merely defending the system. It is charging for it.

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