Hormuz Mining Drives Oil Costs Up While Trump Policies Cut U.S. Clean Energy Investment

Context The Strait of Hormuz, a 50-kilometer waterway that carries about 20% of global oil each day, was mined by Iranian forces after U.S. and Israeli strikes in February 2026. War-risk insurance premiums for tankers transiting the route jumped from 0.125% to 0.4% of vessel value, adding roughly $250,000 per voyage for the largest ships. Brent crude has stayed above $100 a barrel since the incident.

At the same time, the Trump administration has moved to dismantle many clean-energy incentives. It withdrew the U.S. from the Paris Agreement, paused offshore wind permitting, froze Inflation Reduction Act disbursements, and signed legislation that phases out wind and solar tax credits and the $7,500 federal EV rebate.

Key Facts The REPEAT Project estimates that current legislation will eliminate $500 billion in clean-energy capital investment over the next decade and could prevent up to 140 gigawatts of planned solar and 160 gigawatts of planned wind capacity.

BYD surpassed Tesla as the top global electric-vehicle maker in 2025, selling 2.26 million battery-electric vehicles and 4.6 million new-energy vehicles, which include plug-in hybrids.

What It Means Higher shipping costs raise the price of oil transported through the strait, which can feed into higher gasoline and diesel prices for consumers and businesses. Simultaneously, the projected loss of half a trillion dollars in clean-energy funding could slow the deployment of solar and wind projects, keeping the U.S. grid more reliant on fossil fuels longer than under prior law.

BYD's rise shows that EV demand remains strong outside the United States, especially in China and Europe, suggesting that global electrification may continue even if domestic policy wavers.

Investors will watch whether the U.S. Congress revisits clean-energy tax credits and how long the Hormuz mining disruption lasts, as both will shape oil prices and the pace of renewable build-out.