Protecting “The Prize”: Oil and the U.S. National Interest

American national security policy is based on a misunderstanding about U.S. oil interests. Although oil is a vital commodity, potential supply disruptions are less worrisome than scholars, politicians, and pundits presume. This article identifies four adaptive mechanisms that together can compensate for almost all oil shocks, meaning that continuous supply to consumers will limit scarcity-induced price increases. The adaptive mechanisms are not particularly fragile and do not require tremendous foresight by either governments or economic actors. We illustrate these mechanisms at work using evidence from every major oil disruption since 1973. We then identify the small subset of disruptive events that would overwhelm these adaptive mechanisms and therefore seriously harm the United States. Finally, we analyze the utility of U.S. foreign military policy tools in addressing these threats. Our findings suggest that the United States can defend its key interests in the Persian Gulf—the world's most important oil-producing region—with a less-intrusive, “over the horizon” posture.