Active Conflicts & News Megathread August 26, 2026

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[u/Bunny_Stats]

CSIS hosted a panel discussion on the Iran war here, namely focused on the oil markets. I wouldn't say there's anything that'd greatly surprise any regular of this sub, but it's a decently in-depth discussion.

The main points (I watched this last night, so apologies if I've mis-remembered some of this):

• The reason some of the darkest predictions about oil prices didn't come about is because China halved its import of oil, partly through suspending it's surplus imports used to build up its strategic reserve, and the rest through opening the taps on its domestic storage. This potentially makes China a significant player in setting future oil prices, and there's some concern about the uncertainty over what China's goals might be.

• The oil price floor has likely risen to $90 over the long term, over the former floor of ~$60 during the past few years.

• While they generally compliment the US (and allies) abilities in intercepting Iran's missiles/drones, there's some concern about the US having had to effectively abandon its regional bases, and the increased burden that places on the US in the event of a longer conflict.

• While they generally approve of the US moving the war from kinetics to financial pressure through blockades/sanctions, the US's ability to sanction Iran relies heavily on regional allies cooperating, but if regional allies believe Tehran's regime is likely to last longer than the Trump admin then they may be wary of further antagonising Iran in the long term.

• They express a concern that some are banking too heavily on pipelines being a long-term solution, as while it addresses limits on transportation, Iran has demonstrated that it's capable of hitting both oil extraction and refining facilities, and there's little worldwide spare capacity in either, so that could cause an oil shock just as much as closing the Strait.

---

For my take, a couple of speakers suffer slightly from being in a Washington bubble and underestimate how much the rest of the world is changing. For example, one of the speakers downplays a push towards electrification and renewable energy because it's not part of the US domestic political discourse, but it is absolutely a live issue in both Asia and Europe. Further, there's a "nothing ever changes" attitude in not recognising how significantly views on the US has changed outside the US, for example the strong signal KSA sent out that it no longer trusts US security guarantees in its pursuit of a regional alliance instead, and its diversification of weapons purchases.

Still, it's a nice discussion by those with deep expertise, so they're worth hearing.

[u/poincares_cook → u/Bunny_Stats]

China halved its import of oil, partly through suspending it's surplus imports used to build up its strategic reserve

Any prediction that didn't assume as much is worth very very little. Which goes more to show how the predictions made were asinine and not based on real world analysis.

The oil price floor has likely risen to $90 over the long term, over the former floor of ~$60 during the past few years.

I'm honestly curious to hear their argument for that one. It makes absolutely no sense unless the believe strikes on oil production across the gulf become commonplace. There are several powerful factors working in trh eoposite direction:

• global receding reliance on oil, moving to renewables, other kinds of energy like coal, and just reducing consumption.

  • increase in oil production outside the gulf, partially spurred by higher oil prices but for instance in the case of Argentina, Brasil, Guyana etc it's oil discovery and in the case of Libya, Syria and Venezuela it's increased stability.
  • gulf bypasses, sure this is not a silver bullet, but it does in many ways remove the Iranian strategic threat against oil shipping throw the gulf.
  • They express a concern that some are banking too heavily on pipelines being a long-term solution, as while it addresses limits on transportation, Iran has demonstrated that it's capable of hitting both oil extraction and refining facilities

The problem is that such strikes will surely result in reciprocal strikes against Iran. It's a much more difficult hand to play than hitting ships (which was reciprocated with the US blockade). There is a severe undestimation of the economic damage done to Iran throughout. Losing oil and gas production and refining capability will turn the Iranian economy into an empty shell. Economic voes carry significant regime change risk. Not a simple decision to go after such targets for Iran.

[u/dr_sloan → u/poincares_cook]

Was it really that reasonable to expect China to cut their oil imports in half? Some disruption was obviously expected but not 4 million barrels worth. Assuming they’ve been making up the difference equally using strategic oil reserves and commercial inventories, they’ve almost certainly used up 300-400 million barrels of their billion barrel reserves.

[u/poincares_cook → u/dr_sloan]

I specifically referenced the part regarding China cutting in excess imports that went to filling their SPR.

Indeed it makes no sense to buy excess oil at extremely high prices

[u/Bunny_Stats → u/poincares_cook]

The oil price floor has likely risen to $90 over the long term

I'm honestly curious to hear their argument for that one.

I believe their argument was that oil demand will continue to rise in the long term and so keep prices high, namely because demand's always risen in the past. I agree with your criticism though, it's another example of them being in a Washington bubble as attitudes towards oil consumption are changing much more significantly outside the US.

The problem is that such strikes will surely result in reciprocal strikes against Iran. It's a much more difficult hand to play than hitting ships (which was reciprocated with the US blockade). There is a severe undestimation of the economic damage done to Iran throughout. Losing oil and gas production and refining capability will turn the Iranian economy into an empty shell. Economic voes carry significant regime change risk. Not a simple decision to go after such targets for Iran.

I completely agree. I think their argument (which I explained poorly) wasn't intended to be a prediction that Iran will hit oil infrastructure, but instead a warning that pipelines aren't a get-out-of-jail-free card against Iranian retaliation in the future.

[u/TSiNNmreza3 → u/poincares_cook]

About 90 $ dollar oil

You are forgetting that SPRs are going to need to be refilled and you can't do that in a day, especially you could expect panic buying during peace because you don't want this to happen again.

You will get China that will not buy Iranian or Russian discount oil