American oil age ends; Jonathan Watts warns of grim future

The Great Energy Reckoning

The global balance of power is shifting from oil to renewables, from the declining petrostate in the west to the rising electrostate in the east. History has proven that when the dominant form of energy changes, so too does the pecking order of nations. For most of the past century, that dominant form was oil – a commodity that gave mastery, as Daniel Yergin wrote in his Pulitzer-winning book, and drove empires to war from the Soviet Union to Kuwait. But that era is winding down. Wind turbines and solar panels are already producing record‑cheap electricity, even before the war in Iran pushed up the costs of gas‑ and oil‑fired power. Last year, renewables overtook coal as the world’s top electricity source, and clean energy investment worldwide has risen tenfold to more than $2tn a year – more than double that of fossil fuels. “We have entered the age of clean energy,” the United Nations secretary‑general, António Guterres, observed in February. “Those who lead this transition will lead the global economy of the future.”

The Transition Underway

The story of this shift is not merely technological; it is geopolitical. The epoch of petrol, predominantly produced in the United States, Russia and the Gulf states, is giving way to an era of renewables overwhelmingly manufactured in China. Yet the outcome remains contested. The old petro‑interests still command political, military and financial might, and they are using that power to try to turn back the energy clock. The result, as analysts describe it, is a form of “fossil fuel fascism” – an extremist political movement that breaks laws, spreads lies and threatens violence in a desperate attempt to keep markets open for oil, gas and coal that would otherwise be replaced by cheaper alternatives. Democracies across the planet are now threatened by this movement, which relies on hefty subsidies, disinformation campaigns and military force to prop up demand. The most spectacular contemporary example is the war on Iran – a conflict driven by multiple factors, including Iran’s nuclear programme, Donald Trump’s need for a distraction from the Epstein files, and his alignment with Benjamin Netanyahu, Vladimir Putin and Mohammed bin Salman. But the wider context is that the Earth is becoming a more hostile environment for humanity, exposing economic limits and redefining geopolitical realities. The Iran war has already sent Brent crude prices surging, closed the Strait of Hormuz – disrupting 20 per cent of global oil supplies and significant LNG volumes – and triggered a systemic collapse of the Gulf Cooperation Council’s economic model. In the short term, the biggest windfall has gone to US petroleum companies, which were struggling with low prices before the conflict but now enjoy a spectacular revenue surge while rival Gulf suppliers are choked. Along with Russian and Saudi petro‑companies, US energy suppliers look set to cash in for months, even as consumers pay more at the pumps.

The war is also forcing countries to explore ways to increase their energy independence, initially by raising domestic fossil‑fuel output. By one reckoning, this has increased the likely 2030 production of oil, gas and coal by a fifth – an alarming setback for efforts to reduce greenhouse gas emissions. But that will not be the final reckoning. The conflict has reinforced the argument for both renewable energy and a concurrent shift in geopolitical alignments. Electric cars, for example, have never been more in demand. And the prime beneficiary is China.

China’s Clean Energy Dominance

Beijing has turned the greatest crisis facing humanity – climate breakdown – into an opportunity to finally lay to rest the “century of humiliation” that began when coal‑powered British gunships shredded China’s coastal defences in the Opium War. For most of the past 30 years, China caught up with the west by copying its dirty, coal‑driven model of industrialisation, becoming the world’s biggest carbon emitter. Now it is leapfrogging its rivals on clean energy with astonishing results. For the past two years, China’s carbon emissions have been flat or falling. Last year, the amount of wind and solar it had under construction was double the rest of the world combined, helping the country reach an installed capacity of 1,200GW six years ahead of schedule. Donald Trump absurdly claimed he had not been able to find any wind turbines in China; in reality, the country now has more than the next 18 countries combined. Solar generation capacity in China has just overtaken coal for the first time, and electric vehicles account for more than half of new car sales.

Beijing’s bet on renewables and EVs over the past two decades is paying enormous dividends. The top four wind turbine makers in the world are all Chinese. The country holds a majority global market share in photovoltaic cells and EVs. It also controls the supply of critical minerals essential for batteries, AI datacentres and hi‑tech military equipment. Last year, more than 90 per cent of China’s investment growth came in the renewables sector. China’s clean energy sector is now worth 15.4tn yuan ($2.2tn; £1.6tn) – bigger than all but seven of the world’s economies. It accounts for 11.4 per cent of China’s gross domestic product, up from 7.3 per cent in 2022. Beijing plans to invest over $6tn in low‑carbon power and clean energy over the next 20 years, and its Belt and Road Initiative is increasingly focused on green energy: by the end of 2023, Chinese investments in solar and wind accounted for nearly 42 per cent of its overseas energy engagement. Thanks to these trends, cleantech from China is affordable in many global south nations, spreading electric cars to Africa and South America. To be sure, China is simultaneously the world’s biggest investor in coal and far from a democracy, but the scale of its renewable industry means Beijing now has a growing stake in global climate negotiations – not just for the planet, but for solid business sense.

The turbulence caused by the US‑Israeli assault on Iran only strengthens China’s sales pitch. Former allies of the United States are now lining up to visit Beijing. Canada’s prime minister, Mark Carney; Britain’s Keir Starmer – making the first UK prime ministerial visit in eight years, which yielded a halving of tariffs on Scotch whisky and an AstraZeneca investment; Germany’s Friedrich Merz, who emphasised deeper economic cooperation; and India’s Narendra Modi, who attended the Shanghai Cooperation Organisation summit in China last year, all have met Xi Jinping. The EU president, Ursula von der Leyen, also visited. As he did with Trump, Xi accommodated them from a position of more global authority than any Chinese leader has had since the opium war.

America’s Fossil Fuel Retreat

While China accelerates into the clean‑energy future, the United States under Donald Trump has performed a U‑turn back towards 20th‑century smokestacks. On the same day he was sworn in for his second term, Trump signed an executive order withdrawing the US from the 2015 Paris Agreement – effective January 27, 2026 – and announced he would quit the entire UN Framework Convention on Climate Change and the Cop process. In February 2026, his administration repealed the 2009 “endangerment finding”, the legal basis for almost all federal climate regulation for 17 years. The EPA described it as the single largest deregulatory action in US history; without it, power plants, factories and carmakers have a freer pass to pollute. Trump has filled the Department of Energy and the Environmental Protection Agency with dozens of former oil‑industry employees, declared a “national energy emergency” to encourage mining, drilling and fracking, and signed at least 20 executive orders meant to incentivise fossil‑fuel extraction. He granted $18bn in new and expanded tax incentives for fracking, drilling and pumping. His administration halted the closure of 17GW of coal‑fired power plants and ordered the defence department to procure billions of dollars of coal power. The CEO of the largest US coal company gave Trump a trophy for “undisputed champion of beautiful clean coal”.

The US also used the military to seize control of Venezuela – home to the world’s biggest untapped oil reserves and a key partner to China. Trump said US companies would tap those fossil fuels and “start making money for the country”, but most of the first billion dollars in revenue was initially stashed offshore in a Qatar bank account. After ordering the bombing of Iran, Trump celebrated the spike in crude values: “When oil prices go up, we make a lot of money.” Meanwhile, his government accelerated the phaseout of tax credits for renewable projects, leading to $22bn in clean‑energy cancellations and wind‑power investment falling to its lowest level in a decade. “My goal is to not let any windmill be built. They’re losers,” Trump told oil executives in January. By the end of last year, downsizing and more than 60 project cancellations shook investor confidence. For every dollar announced in clean energy in 2025, three dollars were abandoned, according to an analysis by the E2 thinktank. The record number of factory closures and project reversals eliminated 38,031 clean‑energy manufacturing jobs – more than in the previous three years combined. Worst hit were the EV and battery sectors, each accounting for more than $21bn in lost investment, eroding the global competitiveness of US carmakers.

The US state has essentially been captured by a business group that puts its own interests above the nation’s. During the 2024 election, Trump invited 20 oil executives to Mar‑a‑Lago, promising to scrap barriers to drilling and reverse car pollution controls if they helped bankroll his race. Mike Sommers, president and CEO of the American Petroleum Institute, said Trump’s legislative agenda “includes almost all of our priorities”. Big oil poured a record $450m into the campaigns of Trump and Republicans in 2024, according to the watchdog group Climate Power, then gave another $19m to his inauguration fund. Even though Trump is constitutionally barred from a third term, fossil‑fuel money continues to flow: $25m from Energy Transfer Partners and its CEO, Kelcy Warren. Publicly disclosed funds are only part of the picture; Trump accepted a gift of a Boeing 747‑8 luxury jetliner from the oil‑rich Qatari royal family, and the Abu Dhabi royals bought a $500m stake in the Trump family cryptocurrency business.

The White House argues that the focus on fossil fuels is necessary for national security and “energy dominance”, insisting that increasing supply will bring down costs, trim inflation and stimulate the economy. Ten years ago that might have been true. But today solar and wind prices have fallen below coal, ushering in what the International Energy Agency calls the cheapest electricity in history. The Trump administration is denying US consumers these benefits: electricity prices rose faster than inflation even before the Iran war. Between 2021 and 2024, the renewable sector was generating jobs 50 per cent faster than the rest of the labour market, high‑value employment with long‑term prospects, compared with oil and gas extraction jobs projected to decline by 6 per cent over the coming decade. Most disturbingly, all of this creates a perverse incentive for the US to use its economic, diplomatic and military power to stimulate the fossil‑fuel market. Last September, Energy Secretary Chris Wright – a former fracking magnate – went on an arm‑twisting tour of Brussels and Milan to press the EU to buy more US liquefied natural gas. In February, after EU leaders agreed to reduce energy dependency on the US in response to Trump’s talk of seizing Greenland, Wright claimed there was a “climate cult” in Europe. He also said the US would leave the International Energy Agency unless it abandoned its net‑zero goal and stopped referring to “climate stuff”. Huge sums are now being channelled from the US to support far‑right groups in Europe campaigning on anti‑net‑zero platforms.

The championing of fossil fuels depends on a big lie – that the US and the planet can return to an era powered by climate‑destabilising fuels. Trump has repeatedly called the climate crisis a “hoax”, “scam” or “bullshit”, ushering in a period of “climate hushing” designed to stifle public debate. His administration plans to close or slash budgets for the world’s leading science institutions. Billionaire backers are helping to choke debate: after Elon Musk bought X, scientists report the algorithm suppresses their voices and encourages misinformation. The Washington Post, owned by Jeff Bezos, slashed its award‑winning climate reporting team – and by some accounts eliminated it entirely. The Trump administration’s obsession with fossil fuels will dwarf the economic and human toll of the Iran war. The world’s hottest ten years on record have all occurred in the past decade. Extreme weather is pushing up food prices, prompting migration and sparking conflict. Many scientists fear the planet is heating faster than expected, pushing oceans, the Amazon, coral reefs, the Arctic and Antarctic closer to the point of no return, with an El Niño expected to supercharge temperatures further.

Throughout the world, a huge majority of people want stronger climate action. So fossil ambitions run up against popular opinion, forcing proponents to rely on force – more oppression at home, more war overseas. This is precisely why China suddenly seems a more appealing and serious alternative. Beijing’s political system remains repressive – it locks up journalists and dissidents – but the gap in its human‑rights record compared with that of the US has narrowed, while its energy policy is increasingly aimed at halting climate breakdown rather than making it worse. China is also building up its military and investing in AI, though at much lower levels than the US. From the perspective of Europe, Africa or Latin America, the choice is stark: do you align with China, a modern electrostate that engages in multilateral decision‑making and can supply energy autonomy? Or with the US, which appears to be turning the clock back to 20th‑century fossil‑fuel domination and 19th‑century imperial gunship diplomacy?

The fightback is already under way. On one side stand the vast majority of the world’s people, 99.9 per cent of climate scientists, and the fastest‑growing, greatest‑job‑creating chunk of the global economy: the clean energy sector. On the other side stand Trump and the primary producers and users of fossil fuels, who need enormous taxpayer subsidies to stay profitable and ever greater violence to quell opposition. The latter controls the US state and is allied with much of the money of Silicon Valley’s power‑thirsty datacentre companies. Guterres warned last month: “Some fossil fuel interests remain hellbent on slowing progress, spreading disinformation, pretending the transition is unrealistic or unaffordable … The world’s addiction to fossil fuels is one of the greatest threats to global stability and prosperity.” Yet resistance is mounting. California already gets two‑thirds of its electricity from renewables and has pledged to expand. Texas, historic home of the US oil industry but also the centre of wind power, is bristling at Maga‑led attempts to curtail renewables. Michigan is suing BP, Chevron, ExxonMobil, Shell and the American Petroleum Institute, alleging a decades‑long conspiracy to delay the energy transition. Judges in Virginia, New York and New England – including a Trump appointee – have issued injunctions against government efforts to halt windfarm projects. Trump’s popularity has plummeted, and polls suggest his party will lose heavily in the autumn midterms – if they are allowed to go ahead without Maga interference. The movement could become more deranged and violent in its efforts to turn back the clock, suppress dissent and thwart China’s rise. But ultimately, the planet will have the final say.