In this week's edition of Let's Talk Energy, Claudio Galimberti, Chief Economist at Rystad Energy, joined Noah to assess the possible long-term impacts of the war in the Middle East. The conflict has brought the geopolitics of energy and near-term market disruptions into sharp focus, as the world struggles with higher oil and natural gas prices and tighter supplies overall. But underlying fundamentals, which pointed to growing oversupply in both oil and, to a lesser extent, gas markets, persist despite war-driven distortions. Read a Q&A excerpt from the episode below, and listen or watch the full conversation here — How the worst oil crisis ever recorded could end in energy abundance

Noah Brenner: Give me the most important takeaway from the House View report in a single sentence. 

Claudio Galimberti: "This crisis has put energy security back at the top priority for all governments — not just the United States, China, or Europe, but all governments in the world now understand that energy security is the dominating factor in their energy policy." 

NB: This looks a bit more like the Gulf War than the Arab oil embargo — a short sharp shock rather than a structural shift. Is that a good way to contrast it? 

CG: "Sitting here at the end of May 2026, it doesn't look like we're going to go through a blue-sky scenario. If the United States and Iran are unable to reach a deal, then we are in a situation of a longer disruption. At the end of the day, it all depends on where oil prices will be. If oil prices remain above $100 per barrel for the next three, four, five quarters, then you will start to see more structural effects on demand and on supply." 

NB: If we do get a resolution, are consumers doomed to years of high prices given all the barrels that we've lost — or does the surplus that we were expecting this year just come back delayed? 

CG: "We will probably not see a full normalization until October, even if we have a narrow deal. And by then we will have lost close to two billion barrels of production. The total global inventories is between 7.5 and 8 billion barrels. So, we will have lost, as a result of this crisis, close to 30% of global inventories. Those need to be rebuilt. What we are basically factoring in is an additional temporary demand for stock refill and SPR of 1 to 1.5 — in some cases could be 2 — million barrels per day for the next two to three years. That will temporarily reduce the amount of oversupply we're going to see in the market and therefore provide a floor to prices for the next two to three years." 

NB: What about a worst-case scenario? What if we don't get a resolution to this conflict anytime soon? 

CG: "We don't think that the resumption of hostilities is actually a likely scenario because it's going to be too painful for all the parties involved — the United States, Iran, and eventually China. This is a scenario where oil prices would be above $200 per barrel. That is equivalent to a mega-recession — something like the Great Financial Crisis of 2008. I think that all governments are aware of that. I've been talking about this as a nightmare scenario for the past two, three months, saying that we only have a limited time to avert it." 

NB: How are we thinking about price trajectory? You stepped through some potential scenarios as well as potential oversupply, particularly beginning say next year. 

CG: "If we indeed go through a narrow deal and therefore have production approaching the pre-war level by October in the Middle East, then oil prices as an average in 2026 would be at around $102 per barrel. And then gradually they will decline in 2027 towards $80 per barrel and towards $70 per barrel in 2028. If we don't have a narrow deal — if we go through a stalemate or a resumption of hostilities — then these are scenarios with prices above $140 per barrel, and then we need to factor in a recession." 

NB: Any parting thoughts — what haven't we touched on that you think people should know? 

CG: "Energy security means redundancy, which intrinsically means less efficient and therefore more costly. The only caveat I have is that the other legacy of this crisis appears to be higher production of oil. Let's not forget we were coming into this crisis with a surplus. We are getting out of this crisis with potentially an even higher surplus. So, you're going to have these two elements — more costly energy production, as a result of energy security and redundancy, but also higher surplus. There's going to be a very interesting tension in the market in the next couple of years." 

Stream the episode here: How the worst oil crisis ever recorded could end in energy abundance

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House View Report 

Our House View Report examines how the Middle East crisis and prolonged disruption in the Strait of Hormuz are reshaping the global energy system. Published in direct response to the war in Iran, it is a timely assessment of an evolving crisis: what has changed, what has been stable throughout and whether the disruption will prove transformational or transitory.