CSIS warns emergency buffers from Iran war near limits

The six-month war with Iran has produced one of the most consequential shifts in global energy markets in decades, forcing governments to deploy emergency reserves, redirect shipments, and lean heavily on the United States as a supplier of last resort, according to a new analysis published this week by the Centre for Strategic and International Studies.

The study, titled "Six Charts to Explain the Global Energy Crisis," traces how the disruption of the Strait of Hormuz — through which roughly a quarter of the world's seaborne oil trade normally passes — set off a chain of emergency responses that have so far prevented a full-blown supply catastrophe but left the global energy system running on borrowed time.csis

Emergency Reserves and Price Swings

Brent crude rose from around $70 a barrel before the conflict began on February 28 to $145 in April, before settling near $90 by the end of August. The price spike was blunted in part by the largest coordinated oil reserve release in International Energy Agency history: all 32 IEA member countries agreed to make 400 million barrels available to the market, of which roughly 290 million barrels had been released by the end of July.iea+2

Saudi Arabia and the United Arab Emirates expanded exports through Red Sea infrastructure bypassing the strait, while Iraq rerouted crude through Syria via roughly 1,000 tanker trucks per day. The United States, already exporting 3.9 million barrels per day of crude and 6.6 million barrels per day of refined products before the war, boosted shipments further as higher international prices pulled American oil toward Asia.csis

China's Demand Reduction

China played an outsized role in preventing a deeper crisis. The world's largest crude importer entered the war with nearly 1.4 billion barrels in combined commercial and government stocks and cut crude imports by about 32 percent, from an average of 11.6 million barrels per day in 2025 to 8 million barrels per day. Goldman Sachs The Goldman Sachs Group, Inc. ↘ 0.36% estimated that by late August, crude oil was around $10 a barrel cheaper than it would have been had China continued buying at prewar levels.english.ahram+2

Beijing also restricted exports of refined fuels during the spring, directing limited supplies to allied nations such as Vietnam and Thailand while cutting off Australia and the Philippines, according to The New York Times ↗ 4.26% reporting cited by News18. Chinese imports began rising again in July and August, raising the prospect of renewed competition for constrained supplies.news18+1

LNG Shortages and Ripple Effects

The crisis reshaped liquefied natural gas markets as well. Iranian strikes on Qatar's Ras Laffan facility and the closure of Hormuz cut Qatari LNG supply to Asia, pushing Asia's share of U.S. LNG exports from about 12 percent in January to 40 percent in May. That redirection left Europe exposed: gas storage stands at just 68 percent, well below the 80 percent winter target, with prices climbing toward levels last seen during the energy crisis triggered by Russia's invasion of Ukraine.english.ahram+1

CSIS cited BloombergNEF estimates that the war has delayed an anticipated global LNG surplus from 2027 to 2028 and could instead produce a 3.3-million-ton LNG shortage in 2027. The disruption also severed a third of global helium supply, forcing Samsung and SK Hynix ↗ 2.78% to sign long-term contracts with American producers to secure the gas essential to semiconductor manufacturing.csis

CSIS warned that the emergency measures holding markets together — reserve drawdowns, Chinese import cuts, rerouted shipments — cannot last indefinitely. "Soon, the European Union, the United States, and others will need to refill their strategic reserves, competing for supply in a tight market, driving crude prices ever higher," the report concluded.csis