Changing the Board, Part 2: The Free Ride

In 1943, President Franklin Roosevelt declared that “the defense of Saudi Arabia is vital to the defense of the United States.” Two years later, he became the first American president to visit the Persian Gulf, meeting King Ibn Saud aboard the USS Quincy in the Great Bitter Lake of the Suez Canal.¹

That meeting set in motion a commitment that would span eight decades, cost trillions of dollars, and ultimately serve the economic interests of countries that contributed almost nothing to its maintenance.

This is the story of the free ride.

The Escalating Guarantee

American commitment to Gulf security didn’t arrive fully formed. It was built in layers, each president adding to the structure the previous one had erected.

Roosevelt established the principle: Saudi oil is a vital American interest. Truman extended it, committing to resist Soviet expansion toward the Gulf. Eisenhower formalized a doctrine of intervention. Nixon, watching Britain withdraw its naval presence from the Gulf in 1971 after centuries of colonial dominance, adopted a “twin pillars” strategy that relied on Iran under the Shah and Saudi Arabia to maintain regional stability.²

That strategy collapsed overnight in 1979 when the Iranian Revolution toppled the Shah, and then the Soviet Union invaded Afghanistan, threatening to push toward warm-water ports. Both pillars were gone within months.

Jimmy Carter’s response, delivered in his January 1980 State of the Union address, drew the line that American foreign policy would spend the next forty-six years defending. He declared that any attempt by an outside force to gain control of the Persian Gulf region would be “repelled by any means necessary, including military force.”³

This became known as the Carter Doctrine. It created the Rapid Deployment Joint Task Force, which evolved into United States Central Command. It put American military power on a permanent footing in the Middle East for the first time. And it established, in plain language, that the United States would go to war to keep Gulf oil flowing.

Gulf oil, specifically - the oil that, as we established in Part 1, primarily flowed to Asia and Europe.

The Bill

Calculating what the Carter Doctrine has cost is an exercise in deciding what to count. The Brown University Costs of War Project, which tracks post-9/11 military spending with academic rigor, puts the direct cost of Middle Eastern military operations since 2001 at over five trillion dollars. When you include interest on the debt incurred to fight those wars, long-term veterans’ care, and the broader economic costs, estimates run as high as twelve trillion.⁴

Before 9/11, the US maintained a substantial military presence across the Gulf: naval bases, air bases, pre-positioned equipment, constant carrier group rotations. The Fifth Fleet has been headquartered in Bahrain since 1995. At the conflict’s outset, the US had between forty and fifty thousand personnel stationed across roughly ten countries in the Gulf region.⁵

The Fifth Fleet headquarters in Bahrain was destroyed by Iranian strikes in the opening days of Operation Epic Fury.⁶

Five to twelve trillion dollars. For context, total US GDP in 2025 was approximately twenty-eight trillion. The national debt is roughly thirty-six trillion. The cost of Gulf security represents somewhere between fourteen and thirty-three percent of the entire national debt, depending on which estimate you use.

The primary beneficiaries of that spending were not Americans.

Who Got the Free Ride

The Carter Doctrine guaranteed the free flow of oil from the Persian Gulf. That guarantee underwrote the economic development of every major industrial economy on earth, most of which contributed nothing meaningful to its cost.

Japan built its postwar economic miracle on cheap Gulf energy shipped through sea lanes the US Navy patrolled. South Korea industrialized on the same foundation. China’s manufacturing revolution, which hollowed out American industrial capacity over three decades, ran on oil that American warships kept flowing. Europe heated its homes, powered its factories, and funded its social democracies on energy supplies secured by American taxpayers.

The standard rebuttal is that America benefited too, that the global economy is interconnected, that cheap energy helped American consumers. This is true as far as it goes. But it doesn’t go far enough.

Beginning in the 1980s, the dominant school of economic thought, rooted in the LSE and Chicago School traditions, pushed the United States toward a specific set of policy choices. Abandon domestic energy production as uncompetitive, offshore manufacturing to countries with cheaper labor, and accept deindustrialization as the natural evolution of a service economy. The theory held that free trade and comparative advantage would make everyone richer.⁷

What the theory didn’t account for was the downstream damage. Communities built around manufacturing were gutted. The industrial Midwest became the Rust Belt. Real wages for American workers without college degrees stagnated for forty years. The opioid crisis didn’t happen in a vacuum. It happened in towns where the factory closed and nothing replaced it.

And the entire time, the US was spending trillions to protect the energy supply that made offshoring profitable. The cheap Gulf oil that American military power guaranteed was the fundamental input cost that allowed companies to manufacture goods in Asia and ship them back to American consumers. Without the security guarantee, the cost of energy in Asia goes up, the cost of manufacturing goes up, and the math on offshoring changes.

The United States was, in effect, subsidizing the destruction of its own industrial base while the countries that benefited most from this arrangement used their savings to build social infrastructure that Americans were told they couldn’t afford. Universal healthcare, free university education, robust public transit, generous parental leave - programs that aren’t inherently expensive, they just become affordable when someone else is paying for your defense.

European NATO members have chronically underfunded their militaries, spending well below the alliance’s two-percent-of-GDP target for decades. This is well documented and not seriously disputed. They could afford to underinvest in defense because the United States was providing the security umbrella that made underinvestment a rational choice.

The NATO Trap

Which brings us to what happened in the first weeks of March 2026.

When Iran struck back at US and Israeli military installations across the Middle East, including the drone attack on RAF Akrotiri in Cyprus, the question of collective defense became immediate and concrete. An attack on a NATO member’s military installation is, by the letter of the treaty, the kind of event that Article 5 was designed to address.

Trump’s response was to call on allies to send warships to the Strait of Hormuz. Not to defend a treaty obligation in the abstract, but to do something specific and measurable - send ships.

As we documented in Part 1, the response was silence. France conditioned any escort mission on the war ending first. Germany expressed skepticism. Japan refused. Australia refused. No nation publicly committed warships to Hormuz.⁸

Trump posted on Truth Social: “We’re always there for NATO. We’re helping them with Ukraine. It’s got an ocean in between us. Doesn’t affect us, but we’ve helped them. And it’ll be interesting to see what country wouldn’t help us with a very small endeavor, which is just keeping the strait open.”⁹

And: “Whether we get support or not, I can say this, and I said it to them: we will remember.”

Read that carefully. He’s not threatening to withdraw from NATO - he’s building the case. Creating a documented record of requests made and requests refused, establishing in public that the United States asked for help and its allies said no.

If, at some future point, the United States scales back its NATO commitment, or withdraws from the alliance entirely, or fundamentally restructures the terms of collective defense, this is the moment that will be cited. The receipt.

The argument writes itself: we spent trillions protecting your energy supply. We asked you to help protect the strait that your economies depend on far more than ours. You said no. The terms of this arrangement are now open for renegotiation.

The Manufacturing Equation

There’s an economic argument buried in all of this that rarely gets stated explicitly, so let’s state it.

If the Strait of Hormuz stays closed or remains unreliable for an extended period, the cost of energy in Asia goes up permanently. Not temporarily, not as a spike, but as a structural repricing. And if the cost of energy in Asia goes up permanently, the cost of manufacturing in Asia goes up with it.

American manufacturing didn’t die because American workers couldn’t compete. It died because the total cost equation, when you factored in labor, energy, regulation, shipping, and the security guarantee that made it all possible, favored offshoring. Remove the security guarantee, reprice Gulf energy for the countries that actually depend on it, and the equation changes.

The United States has cheap domestic energy. 13.6 million barrels a day of domestic production, a 2.8-million-barrel surplus, and massive natural gas reserves. If you’re a manufacturer looking at a world where Asian energy costs have permanently repriced upward, and American energy remains cheap and domestically sourced, the reshoring math starts to work.

This is the logical consequence of the current situation, not speculation. The only question is whether it’s an unintended consequence or an intended one.

Walking It Back

On the question of intent, there’s a data point worth noting.

In the weeks since the conflict began, Trump has made statements on Truth Social that, read carefully, amount to a repudiation of the Carter Doctrine itself. His framing that countries should “take care of that passage” themselves, that the US “didn’t need anybody,” that the countries who depend on Hormuz oil should be the ones securing it, is a direct inversion of the 1980 commitment.¹⁰

Carter said the US would defend the Gulf by any means necessary. Trump is saying the US shouldn’t have to, and that’s entirely consistent with his broader foreign policy arc - questioning NATO’s value, demanding allies pay more for defense, withdrawing from international agreements, and talking about “America First” in terms that explicitly rejected the postwar consensus of American security guarantees underwriting global stability.

The difference now is that he has the conditions to act on it - a war that puts the question in concrete terms, an energy market that demonstrates American independence, allies who refused to help when asked, and a domestic political environment where the argument, why are we spending trillions to protect countries that won’t even send a frigate, resonates with a public that’s been watching its manufacturing base evaporate for forty years.

The Subsidy, Restated

Here is the argument, stripped to its essentials.

Since 1980, the United States has spent between five and twelve trillion dollars guaranteeing the free flow of oil through the Persian Gulf. The primary beneficiaries of that guarantee were the economies of Asia and Europe, which used cheap Gulf energy to industrialize, manufacture, and build social infrastructure. The United States bore the cost in dollars, in lives, and in the destruction of its own industrial base as the security guarantee it was funding made it profitable to offshore American manufacturing to the countries it was subsidizing.

The countries that benefited most from this arrangement contributed the least to its cost, underfunding their own defense because American military power made that a rational choice.

When the United States asked those countries to contribute to securing the Strait of Hormuz, which their economies depend on far more than the American economy does, they declined.

The Carter Doctrine is forty-six years old. The question is whether it survives to forty-seven.

---

Next: Part 3: The Pivot examines what the US is building while the old system collapses: domestic drilling, Venezuelan oil, Cuban negotiations, Greenland minerals, and the architecture of a Western Hemisphere energy order.

Footnotes

1. FDR’s 1943 declaration on Saudi Arabia and 1945 Great Bitter Lake meeting per standard diplomatic history sources, including Wikipedia’s Carter Doctrine article. ↩

2. Truman, Eisenhower, and Nixon Doctrine progression from Britannica and standard foreign policy histories. Britain’s 1971 Gulf withdrawal from Hoover Institution and Baker Institute analyses. ↩

3. Carter State of the Union Address, January 23, 1980. ↩

4. Brown University Costs of War Project ($5T+ direct costs); higher estimates including interest and veterans’ care from CSIS and related analyses. ↩

5. Visual Capitalist data on US military presence in the Gulf; Fifth Fleet HQ in Bahrain since 1995. ↩

6. The Hill, reporting on Iranian strikes on Fifth Fleet headquarters. ↩

7. This is a synthesis of widely documented economic policy shifts. The specific framing of LSE/Chicago School orthodoxy driving offshoring decisions draws on Grizz Ali’s analytical framework, which I find persuasive on this point. ↩

8. Allied response to Hormuz escort requests compiled from Al Jazeera, CNBC, USNI News, CNN, and multiple wire services, March 3-17, 2026. See Part 1 for full sourcing. ↩

9. Trump Truth Social posts, March 15-16, 2026; CNBC reporting. ↩

10. Trump Truth Social posts and statements aboard Air Force One, March 2026; compiled from CNBC, TIME, Fortune, and Al Jazeera reporting. ↩