ChinaTalk

The biggest oil shock in modern history came and went without the catastrophe everyone expected. When Iran closed the Strait of Hormuz, analysts warned that oil could hit $200 a barrel, but the global economy avoided that fate.

The Trump administration has argued that the crisis was contained thanks to their aggressive action, but they may be taking the wrong lessons from the avoidance of that apocalyptic scenario.

What happened was the largest unexpected swing in global oil balances: China quietly cut crude oil imports by more than five million barrels a day. Yet there was no corresponding collapse in economic activity, no obvious drop in mobility, and no official explanation from Beijing. Somehow, China stopped buying oil from the rest of the world and started drawing from stockpiles we can’t fully observe.

That single decision may have done more to prevent a global energy crisis than anything Washington or OPEC accomplished.

This matters because it demonstrates that China likely has a stronger discretionary policy lever than the West does. The West is really good at market-driven, private-sector oil production. But through this crisis, we’ve seen that Washington does not have the scale of discretionary policy control that China or OPEC does. This time, China cooperated and did the good thing, at least for the broad economic picture — but we cannot rely on that in the future, and that tool can be used against the West as easily as for it. Western governments must grapple with that discretionary gap and not rest on their private-sector bona fides to get through the next crisis.

Arnab Datta, managing director of policy implementation at Employ America, and Rory Johnston, oil analyst and founder of Commodity Context, join ChinaTalk to discuss:

Why Rory’s own prediction of $200 oil never happened and why J.D. Vance is thanking the wrong people.

How China quietly cut crude imports by five million barrels a day with zero visible impact on domestic mobility, and the detective work analysts use to peer into Beijing’s black-box inventories.

Competing theories for why Beijing backstopped the global oil market — self-interested altruism, a backroom deal during the state visit, or a dry run for a Malacca blockade in the event of a Taiwan contingency.

What India, the Gulf states, and the rest of the world learned from the Iran War and why strategic reserves are suddenly back in fashion.

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Five months into the Iran campaign, the US has two carrier strike groups parked in the Arabian Sea, a blockade that may take months to bite, and a daisy chain of tankers stretching thousands of miles because there is no longer any fuel or food to buy inside the Gulf. Now the Houthis have entered the chat and declared their own blockade of the Bab el-Mandeb.

Just the OG crew with Bryan Clark, senior fellow at the Hudson Institute and a former submarine officer, Justin Mc a former special operations officer who works on defense technology, and Tony Stark.

We discuss…

What Trump is doing in Iran, why the Navy is short-cycling ships out of maintenance and what happened the last time the fleet ran this hot, from McCain and Fitzgerald to the Truman’s two collisions in one deployment

Why a ground campaign in Iran is a fantasy, from the Marsh Arabs to the Alborz range to the Baluch salt flats, and what Shia militias in Iraq would do to the logistics tail

The nuclear-powered cargo ship renaissance and why circumnavigating Africa at 30 knots suddenly pencils out

Whether Congress should get an AI kill switch, why DHS is the wrong home for it, and what happens when the boy who cried wolf is finally right

Ukraine’s civ-mil drama

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The whole ChinaTalk gang gets together to discuss a big week in China AI with the release of Kimi K3 and Xi talking open source and safety at WAIC. We also discuss our latest article exploring the three potential scenarios for Chinese governance when they really get their Mythos moment (you can read here: https://www.chinatalk.media/p/chinas-mythos-moment-366).

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What do actual historians think about the Thucydides Trap? Does our 'low T' discourse all just come back to the movie 300? How the did ancient Greeks fight and why does Homer still keep us coming back 2700 years later?

To discuss we have on the excellent Roel Konijnendijk, professor at Oxford and author of Classical Greek Tactics: A Cultural History.

Tony Stark and Justin McIntosh join.

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Claude Mythos scrambled American AI policy, leaving us with what Dean Ball calls a de facto involuntary licensing regime from the administration that promised us the opposite. Zhipu's cofounder says China will have a Mythos-class model before the end of the year; IAPS says February 2027. Either way, Beijing is about to face down the same question, but unlike Washington, it already has a form to fill out.

Guests: Kevin Xu of Interconnected. Matt Sheehan, a fellow at the Carnegie Endowment.

We discuss…

Why China's answer to Mythos will look like Glasswing — but started by the state, not a lab, with government ministries and central SOEs first in line

Whether the CAC's content-testing regime can absorb cyber, and why a Chinese lab dropping a frontier model without a heads-up would be "very bold and self-destructive behavior"

The mixed signals on open source — a Reuters report on MOFCOM and NDRC weighing export controls on model weights, versus Minimax and Zhipu founders publicly doubling down, with Xi's WAIC speech as the tiebreaker

Whether open weights even matter when running a frontier model adversarially requires a datacenter, and the case that lighting the dark park makes it safer

What the US and China can actually agree on — non-state actors, eval methodology sharing, and why labor displacement lessons don't travel

Companion-app regulation flowing from Sacramento and Albany to Beijing, the AI policy brain drain into the labs, and whether Sam Altman's five percent is American state capitalism or just a Trump thing

song: https://suno.com/s/xZE1pIKrVBtCfTBO
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