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Art Berman: Iran War Causing 'Phase-Shift' in Oil Markets, 'Will Never' Return to Normal

Palisades Gold Radio Aug 20, 2026

Summary

Iran war oil losses have settled around 5 million barrels per day — historically massive, though demand destruction and inventory draws have cushioned the immediate impact.

Oil markets have a 'savings account' (inventories) and a 'paycheck' (daily production) — the savings cushion is finite and being drawn down fast.

Berman calls the Iran war a 'phase shift' for oil — even after a political settlement, the market will not return to its pre-war normal.

Comparative inventory points to potential $140 oil by November if current drawdown rates continue, based on a 0.78 R-squared historical fit.

Diesel crack spreads above $100 reveal a refining squeeze; the industry's adaptive response has bought time, but no new oil is being created.

Stijn Schmitz's takeaways

  • Top takeaway Frames the discussion around two questions for the Iran war context: why no larger disruptions to daily life despite the Iran war's severity, and whether diesel price spikes signal those disruptions are about to materialize
  • Pushes the conversation toward alternative supply, raising crude sourness/mix, refinery compatibility, and the geography of bypass routes from the Persian Gulf

Art Berman's takeaways

  • Top takeaway The Iran war has caused a 'phase shift' in oil markets that 'will never' return to pre-war normal, even if the Strait of Hormuz is reopened and political relations restored
  • Persian Gulf production is down roughly 7 million barrels a day versus February and global liquids supply is down about 10 million barrels a day, with Gulf barrels shut in because tankers cannot take them away
  • Oil is only in the $85-$90 range because global commercial inventories still hold more cushion than they did during the Ukraine war, when prices hit $130; the loss will eventually catch up with markets
  • Using his comparative inventory method (current inventories minus the five-year average, with a ~0.78 R-squared correlation to price), he projects that at current drawdown rates crude could reach the $140-$150 level by around November 2026
  • He argues a bifurcation is forming in the oil system — China, Iran, Russia and allies operating a separate market, currencies and payment rails from the US/Europe/Americas bloc — and that the Iran war is accelerating fragmentation rather than allowing a return to the old single market