The Donroe Doctrine
Special Report • March 12, 2026
The Donroe Doctrine
From Venezuela to Iran — How Trump’s Foreign Policy Is Reshaping the American Economy
In Brief: In January, President Trump captured Venezuela’s leader and declared a new era of American hemispheric dominance. Two months later, the consequences — a war with Iran, the effective closure of the Strait of Hormuz, surging gas prices, a $50 billion emergency military funding request, and a fertilizer shock threatening global food supplies — are landing squarely on the kitchen tables of American families. This report examines how we got here, what it’s costing, and who stands to benefit.
What Is the Donroe Doctrine?
On January 3, 2026, U.S. special forces captured Venezuelan President Nicolás Maduro in a raid on his compound in Caracas. Within hours, President Trump held a press conference at Mar-a-Lago and coined a term for the foreign policy vision driving the operation: the “Donroe Doctrine” — a mashup of his own name and the 1823 Monroe Doctrine, which asserted American dominance over the Western Hemisphere.
The intellectual foundation had been laid two months earlier in the November 2025 National Security Strategy, which formally declared a “Trump Corollary” to the Monroe Doctrine. The strategy stated the United States would “reassert and enforce the Monroe Doctrine to restore American preeminence in the Western Hemisphere” and would “deny non-Hemispheric competitors the ability to position forces or other threatening capabilities, or to own or control strategically vital assets, in our Hemisphere.”
In practice, the Donroe Doctrine extends well beyond Venezuela. Trump has openly declared Cuba is “ready to fall,” threatened Colombia with similar military action, renewed demands to annex Greenland from NATO ally Denmark, and continued pushing for control of the Panama Canal. The doctrine also provided the framework for the administration’s most consequential action yet: the February 28 military strikes on Iran under Operation Epic Fury, which killed Supreme Leader Ali Khamenei and triggered the most significant global energy crisis in decades.
The Three Theaters
Venezuela: The Opening Act
The Maduro capture was preceded by months of escalating pressure: deadly strikes on boats in the Caribbean and Pacific alleged to be carrying drugs, a naval blockade on Venezuelan oil tankers, and a massive military buildup in the region. The administration justified the operation by citing Venezuelan ties to foreign adversaries, the presence of offensive weapons, and the broader war on drug cartels.
Trump subsequently declared the U.S. would “run the country” until a transition could be arranged. Secretary of State Marco Rubio outlined a three-phase plan: stabilization, recovery, and transition. Trump also openly referenced Venezuela’s oil reserves — the largest in the world — and suggested subsidizing U.S. oil companies moving into the country. Major U.S. oil companies have been notably tepid in their response, wary of Venezuela’s history of nationalization and institutional instability.
Cuba: Next in the Crosshairs
Cuba has been a centerpiece of Trump’s foreign policy across both terms, and analysts believe the Venezuela operation was partly designed to destabilize the island nation, which has depended on Venezuelan subsidized oil for decades. Cuba reported 32 of its armed forces and intelligence personnel were killed protecting Maduro during the U.S. raid, prompting two days of national mourning. Trump declared Cuba “looks like it’s ready to fall,” and Secretary Rubio warned that if he lived in Havana, he’d “be concerned.”
Greenland: Stretching the Doctrine’s Boundaries
The most geographically ambitious element of the Donroe Doctrine is the push to annex Greenland, an autonomous territory within NATO ally Denmark. The Atlantic Council has argued the administration should define the hemisphere from the Aleutian Islands to Greenland and south to Antarctica, effectively placing the entire region under Monroe Doctrine protection. Danish Prime Minister Mette Frederiksen responded bluntly: a U.S. military attack on a NATO member would end the alliance.
The geopolitical implications extend far beyond the Arctic. Analysts warn that if the U.S. acts with impunity in its declared sphere of influence, it signals to Russia and China that they may do the same — Putin in Ukraine, Xi Jinping regarding Taiwan.
Iran and the Strait of Hormuz: Where Doctrine Meets Reality
Iran was explicitly named in the 2025 National Security Strategy as a hemispheric threat whose influence in Venezuela, Cuba, and the wider region must be neutralized. The administration had already struck three Iranian nuclear facilities in June 2025. But Operation Epic Fury, launched on February 28, 2026, was a fundamentally different scale of operation — coordinated U.S.-Israeli airstrikes targeting military facilities, nuclear sites, and the supreme leader himself.
Iran retaliated with missile and drone attacks on U.S. military bases, Israeli territory, and Gulf states including the UAE, Qatar, Bahrain, and Kuwait. The Islamic Revolutionary Guard Corps declared the Strait of Hormuz “closed” and began attacking ships attempting to transit. The consequences have been immediate and devastating for global commerce.
The Strait of Hormuz by the numbers: A 21-mile-wide waterway between Iran and Oman through which approximately 20 million barrels of oil pass every day — roughly 20% of the world’s total consumption. It also carries about 20% of global LNG trade, 30% of Europe’s jet fuel supply, and one-third of the world’s fertilizer exports. Traffic normally averages 138 ships daily; it has dropped to effectively zero.
Iran hasn’t physically blockaded the strait. Instead, a combination of IRGC threats, actual attacks on vessels (at least ten ships struck, seven seafarers killed), and the withdrawal of maritime war risk insurance has created a de facto closure. As the analytics firm Kpler summarized: “Insurance withdrawal is doing the work that physical blockade has not.”
Brent Crude Oil Price Trajectory — Pre-War Through March 12, 2026
The Insurance and Shipping Crisis
The maritime insurance market’s response has been swift and dramatic, amplifying the physical disruption into a near-total commercial shutdown. War risk premiums have surged over 1,000% in some cases. Before the conflict, war risk insurance for ships transiting the strait ran about 0.125% to 0.25% of hull value. New contracts are now being written at 1% of hull replacement value, renewable every seven days.
| Metric | Pre-War | Current | Change |
|---|---|---|---|
| War risk premium (% of hull) | 0.125%–0.25% | 1.0% | +300% to +700% |
| VLCC daily charter rate | ~$200,000 | ~$800,000 | +300% (record) |
| Marine fuel premium (Singapore over Panama) | Normal spread | $313/ton | All-time high |
| Strait daily ship traffic | ~138 ships | ~0 commercial | −100% |
| Ships anchored outside strait | — | 200+ | — |
Multiple major insurers — including Norway’s Gard and Skuld, Britain’s NorthStandard, and the London P&I Club — have canceled war risk coverage for the Gulf region entirely. Lloyd’s Market Association CEO Sheila Cameron noted that approximately 1,000 vessels with an aggregate hull value exceeding $25 billion remain in the Persian Gulf.
The Trump administration announced a $20 billion reinsurance program through the U.S. International Development Finance Corporation and suggested the Navy could escort tankers. But shipowners say the fundamental problem isn’t money — it’s crew safety. No financial backstop convinces sailors to transit an active war zone where ships are being hit by drones and missiles.
The ripple effects extend far beyond oil. Maersk, CMA CGM, Hapag-Lloyd, and MSC — the world’s largest container shipping companies — have all suspended Middle East routes. Houthi-controlled Yemen has resumed attacks on Red Sea shipping, forcing Suez Canal traffic to reroute around Africa’s Cape of Good Hope and adding weeks to transit times.
The Cost to American Families
At the Gas Pump
The most immediate pain point for Americans is fuel. The national average gasoline price has surged from about $3.00 per gallon before the war to $3.58 — and climbing. In California, drivers are paying $5.34. Diesel, which powers every truck delivering goods across America, has jumped 28% to $4.83 per gallon.
The average American household spends about $2,500 per year — nearly $50 per week — on gasoline. Every sustained one-cent-per-gallon increase costs consumers an additional $1.4 billion annually. The roughly 60-cent jump so far, if sustained, would extract approximately $84 billion from family budgets over a year. Lower-income households are hit disproportionately, since fuel is not a discretionary expense.
Gas Price Timeline: National Average — January Through March 2026
Inflation: Progress Reversed
Before the war, the economic picture was improving. February’s Consumer Price Index showed inflation at 2.4% annually, with gasoline prices actually down 5.6% year-over-year. That progress is being erased in real time. JPMorgan estimates U.S. inflation could climb back above 3% in coming months. Morgan Stanley calculates a 10% oil price increase adds about 0.35% to headline consumer prices within three months. Royal Bank of Canada warns that sustained $100-per-barrel oil would keep inflation above 3% for the remainder of 2026.
The impact cascades well beyond gasoline. Airline tickets rise with jet fuel costs. Groceries rise because they’re shipped by diesel-powered trucks. Clothing and consumer goods rise because petrochemicals are feedstocks for plastics, synthetic fabrics, and packaging. For every $10 increase in oil, the overall U.S. inflation rate is expected to rise 0.15%.
Jobs and the Threat of Recession
The economy was already fragile before the first missile flew. The U.S. added just 116,000 jobs for all of 2025 — the weakest total outside of a recession since 2002 — and lost jobs in five of the past nine months. February’s employment report showed the economy shed 92,000 jobs, with unemployment edging up to 4.4%.
EY-Parthenon had forecast 2.4% U.S. growth for 2026 before the war. A short-lived conflict would slightly trim that; a prolonged escalation would cut it by more than half. Yardeni Research raised its probability of a recession-including market meltdown from 5% to 20%. The Dow suffered its worst week since April, dropping 3%. The S&P 500 sank 2%. European and Asian markets were hit harder — Japan’s Nikkei fell 5.5%.
Perhaps most painfully, the Federal Reserve is now trapped. Cutting interest rates could fuel inflation. Holding rates steady risks deepening the slowdown. Futures markets are pricing in virtually no chance of a rate cut, meaning the mortgage relief that homebuyers have been waiting for has evaporated. The 30-year fixed mortgage rate has already climbed from 5.99% at the end of February to 6.14%.
The Hidden Crisis: Fertilizer and Food Prices
While oil dominates the headlines, the most dangerous dimension of the Hormuz disruption may be fertilizer. One-third of the world’s nitrogen fertilizer exports transit the strait. The Persian Gulf accounts for 34% to 50% of global seaborne urea exports. Unlike oil, there is no strategic reserve of fertilizer anywhere in the world.
Urea prices at the New Orleans hub have already surged from $475 to $680 per metric ton. The timing is catastrophic: this is the spring planting window for the Northern Hemisphere. If nutrients aren’t in the soil by the planting deadline, yield potential for the entire year is permanently lost. Analysts warn that even a short-term disruption during March and April could ripple into food price inflation for 18 to 24 months.
Strategic Reserves: Can They Fill the Gap?
The short answer: not even close.
U.S. Strategic Petroleum Reserve — Capacity vs. Current Holdings vs. Post-Release
The U.S. Strategic Petroleum Reserve currently holds approximately 415 million barrels — about 58% of its 714-million-barrel authorized capacity. Trump had pledged to refill it upon taking office but never completed the job. On March 11, Energy Secretary Chris Wright announced the U.S. would release 172 million barrels over approximately 120 days as part of a coordinated International Energy Agency release of 400 million barrels across 32 member nations — the largest in the IEA’s history.
But the math is unforgiving. The Strait of Hormuz normally handles 20 million barrels per day. Even the full 400-million-barrel IEA release, spread over 120 days, yields only about 3.3 million barrels per day — a fraction of what’s blocked. JPMorgan analysts noted that historical emergency releases have peaked at around 1.4 million barrels per day, which “would not materially ease a 16-million-barrel-per-day shortfall.”
After the 172-million-barrel release, the SPR will be drawn down to roughly 243 million barrels — about 34% of capacity and the lowest level since the reserve’s early years in the 1980s.
Europe’s vulnerability: EU gas storage entered 2026 at just 46 billion cubic meters, down from 60 bcm in 2025 and 77 bcm in 2024. Qatar — a major European LNG supplier — halted gas production on March 2 and declared force majeure on contracts after Iranian drones struck Qatari gas facilities. European natural gas prices nearly doubled overnight.
Some bypass infrastructure exists. Saudi Arabia’s East-West pipeline to the Red Sea port of Yanbu has a capacity of about 5 million barrels per day, and the UAE’s Habshan-Fujairah pipeline offers another route. But combined, these cannot replace 20 million barrels daily.
The Taxpayer Bill
The direct military costs of Operation Epic Fury are staggering for a conflict barely two weeks old. The Pentagon told Congress the first 48 hours consumed $5.6 billion in munitions replacement alone — not including operating costs for aircraft and ships. Analysts estimate the war is running between $800 million and $2 billion per day. The Penn Wharton Budget Model projects a total direct taxpayer cost of approximately $65 billion if the conflict runs two months.
Estimated U.S. Military Spending — Operation Epic Fury Through March 12, 2026
| Cost Item | Estimated Amount |
|---|---|
| Munitions in first 48 hours | $5.6 billion |
| Daily operating cost (ongoing) | $800M – $2B / day |
| Pre-strike military buildup | $630 million |
| Tomahawk missiles fired (~400) | ~$880 million |
| Fighter jets lost to friendly fire (3) | ~$351 million |
| Interceptor cost ratio vs. Iranian drones | 363 : 1 |
| Pentagon supplemental funding request | ~$50 billion |
| Projected 2-month total (Penn Wharton) | $65 billion |
The Pentagon is preparing a supplemental budget request of approximately $50 billion to replace depleted munitions and equipment. The request echoes the “overseas contingency operations” funding mechanism used during the Iraq and Afghanistan wars, which experts called a “slush fund” — by the time it was shut down in 2021, Congress had allocated over $2 trillion through it with limited oversight.
This spending arrives at the worst possible fiscal moment. The Congressional Budget Office’s February projections already showed federal deficits on track to reach 6.5% of GDP and total debt hitting 120% of GDP by 2035, with interest payments alone consuming nearly one-fifth of all federal spending. Add the estimated $65 billion in war costs to the $74 billion in lost revenue from the Supreme Court’s recent invalidation of Trump’s tariff regime, and the combined budget impact approaches $139 billion — raising the projected annual deficit by 7.5%.
Not all Republicans are united on the spending, however. Rep. Chip Roy (R-TX), a fiscal conservative, pressed for answers: “A lot of us are very happy with going after and taking out Iran’s capabilities and taking out a lot of their bad guys, but what’s the endgame? Number two, is it paid for?” Senate Majority Leader John Thune (R-SD) said the war could be “generational in terms of its impact,” but acknowledged the military is burning through ammunition and noted the need for a supplemental may become necessary.
Munitions Depletion: A Cost Beyond Dollars
During the June 2025 twelve-day conflict, the U.S. expended up to 30% of its THAAD interceptor stockpile. Even at quadrupled production rates, replacing 150 THAAD interceptors takes nearly five months. At the current rate of consumption, the entire U.S. interceptor stockpile could be exhausted in four to five weeks — creating vulnerabilities for NATO, Ukraine, Taiwan, and Japan, all of which depend on American air defense systems.
Raytheon has agreed to eventually produce 1,000 Tomahawk missiles per year, but the Pentagon currently plans to buy only 57 this year. Weapons stockpiles were already strained by years of support to Ukraine and Israel before Epic Fury even began.
Who Benefits?
In every crisis, there are winners. The Donroe Doctrine and the cascading conflicts it has triggered are no exception.
U.S. Oil and Gas Producers
American energy companies are the most direct beneficiaries. The U.S. is now a net energy exporter, and domestic producers see enormous windfalls when global oil prices surge. Every dollar of price increase translates directly into higher revenue for shale producers in the Permian Basin, the Bakken, and other domestic fields. Energy company stock prices have surged while the broader market has fallen. The cruel irony is that the same conflict making gasoline unaffordable for American families is making energy company shareholders wealthier.
Defense Contractors
The war is a procurement bonanza for the defense industry. Trump met with defense contractors and announced they had agreed to quadruple weapons production. A $50 billion supplemental funding request is essentially a guaranteed revenue pipeline for Raytheon, Lockheed Martin, Northrop Grumman, and other major contractors. Notably, Donald Trump Jr. and Eric Trump are investing in a drone company that is reportedly vying to meet fresh Pentagon demand. The pattern echoes the Iraq and Afghanistan eras, when defense spending became a self-reinforcing cycle that persisted for two decades.
Russia and China
Geopolitically, the two powers most likely to benefit from American overextension are Russia and China. Russia benefits from higher energy prices — as a major oil and gas exporter, every dollar added to the global price is revenue for Moscow’s war effort in Ukraine. The depletion of U.S. weapons stockpiles and attention simultaneously weakens the American capacity to support Kyiv.
China benefits from the strategic signal: if the U.S. can act with impunity in its declared sphere of influence, China can argue the same logic applies to Taiwan and the South China Sea. China has also continued purchasing Iranian oil through the strait via Chinese-flagged vessels, establishing an energy corridor that operates outside Western sanctions and insurance frameworks. At least 11.7 million barrels of Iranian crude have reached China since the war began.
Alternative Energy and EV Companies
Every oil shock is an advertisement for energy independence through alternatives. Companies in solar, wind, battery storage, and electric vehicles tend to see increased investor interest when gasoline prices spike. However, the administration’s repeal of EV consumer rebates, elimination of carbon pollution standards, and rollback of fuel economy fines have made it harder for American families to switch to cheaper-to-operate electric vehicles — decisions that now look particularly costly in hindsight.
Who Loses
The losers are far more numerous. American consumers face higher prices on gasoline, diesel, groceries, airline tickets, clothing, and consumer goods. Homebuyers face rising mortgage rates. Small businesses face higher input costs and freight expenses. Farmers face surging fertilizer prices during the planting season. Taxpayers face tens of billions in direct military costs being added to an already unsustainable national debt. Workers in a weakening labor market face reduced hiring and potential layoffs. Developing nations face potential food shortages. And American service members — seven killed as of this writing — are paying the ultimate price.
Winners and Losers — Estimated Impact by Sector
The Bottom Line
The Donroe Doctrine is the most consequential shift in American foreign policy since the end of the Cold War. In less than three months, it has produced a captured foreign head of state, a war with Iran, the effective closure of the world’s most important energy chokepoint, the largest coordinated oil reserve release in history, a $50 billion emergency military funding request, surging inflation, a weakening job market, and a geopolitical landscape that several analysts describe as a return to great-power spheres of influence.
For the typical American family, the impact is painfully concrete: higher prices at the pump, at the grocery store, on airline tickets, and on mortgage statements. The fertilizer crisis threatens to extend food price inflation well into 2027. The national debt trajectory, already described as unsustainable by the CBO, is being accelerated by military spending that history suggests will compound for years.
The administration maintains that these are short-term costs of long-term security. Critics counter that there is no articulated endgame, no congressional authorization, and no evidence that the conflicts will be short-lived.
Whatever its geopolitical merits, the Donroe Doctrine will ultimately be judged by its domestic footprint. The relevant metrics aren't diplomatic or on Wall Street — they're on Main Street: profit margins for small businesses, crop returns for farmers, household budgets for working families. Policy made in Washington finds its verdict in places like Lodi, in the daily arithmetic of businesses and families making ends meet.
Sources
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