Michael O'Hanlon, director of foreign policy research at the Brookings Institution, tells Mike Santoli that the G20 meeting in North Carolina is missing the people who could end either war, and that the Putin and Xi meeting on the sidelines of the Shanghai Cooperation Organization summit will not change that. The show's own reporting from the rest of the hour, including Megan Cassella at the G20, is covered in the Bob Michele summary from this episode.
👤 Guest: Michael O'Hanlon, director of foreign policy research at the Brookings Institution
🎙️ Host: Mike Santoli, who anchors Closing Bell Overtime from the Nasdaq market site and writes CNBC's Market Memo newsletter
📰 Published: 31 August 2026 on the Closing Bell podcast feed
🟣 Apple Podcasts | ⏱️ 42 min
Key Takeaways
The G20 cannot solve either war because the people who started them are not in the room
"My headline read is that it probably won't achieve great things."
The absent parties he names are Putin and the Iranian leadership
What the meeting can do is plan for shortages, and food is now on that list alongside oil
Shipping is being threatened in the Black Sea more than it has been for some time
He does not think China likes this war, and he still does not expect Xi to act on that
"they've got each other's strategic backs" — quiet criticism, no leverage
China will not stop supplying the machinery Russia builds weapons with, or stop buying its oil and gas
The violence in the Middle East and Ukraine is drawing down weapons the US would need against China
Which he says is a reason Beijing tolerates it, even while the risk to the world economy worries it more
Iran is playing for this fall, when strategic reserves get low enough to move prices
The first six months of reduced flows through the Strait were absorbed by reserves and by China using less oil
The prize he names is negotiating leverage — over tolls in the Strait of Hormuz, or over the nuclear program
Putin is too dug in to admit the war was a mistake, and O'Hanlon cannot say what he is still fighting for
"I just don't know what he's really hoping for. It's such a crying shame."
Why This G20 Cannot Reach the Thing That Is Driving Everything Else
Santoli opened by noting that while the G20 finance ministers were meeting in North Carolina, Russia's President Putin and China's President Xi had met on the sidelines of the Shanghai Cooperation Organization summit, in what he called a sign of pushback against U.S. influence. He asked O'Hanlon for his headline read.
"My headline read is that it probably won't achieve great things." He said the G20 often struggles: "There are a lot of competing priorities in the world and 20 different countries aren't going to see them all eye to eye"
The problem is who is absent. The key issues involve people who are not there, are not talking to the United States and are not interested in working with it — he named Putin and the Iranian leadership
The two wars are upstream of everything else on the agenda, including the world economy, and he put the difficulty as a question: "And yet, how much progress can we make on them if we're not even able to deal with the main cause of either initial conflict in the first place?"
What the Meeting Can Actually Do: Plan for Shortages, and Food Is Now on the List
The realistic agenda is mitigation rather than resolution. People can talk about mitigating harmful effects, and "They can anticipate where the Iran crisis may go this fall."
"They can talk about how to commonly respond to growing shortages of oil if that materializes, as well as food, because now shipping is being threatened in the Black Sea even more than has been the case for a while."
"And so those kinds of issues can be discussed, but we can't really know where they're headed, and we're not going to be able to solve them with this kind of a meeting."
Santoli's own marker for how far this has already traveled: "I would note just the kind of the broad commodity indexes are now above where they were in that initial surge after the invasion of Ukraine." — and he said it is showing up in agricultural commodities as well as energy
The Putin and Xi Meeting: a Hope Against Hope That Beijing Says Enough
Santoli asked whether the meeting was simply the two leaders maintaining a connection as a counterweight, or whether something more tangible was happening.
"I mean, I'm still hoping. It's a hope against hope that someday somehow Xi Jinping tells Putin, enough's enough. I don't really think China likes this war."
Beijing's calculation cuts both ways, and he laid out both sides. "Of course, they recognize there are some ways in which it hurts us more than it hurts them. And all the resulting violence in the Middle East and Ukraine deplete us of inventory of weapons we would need if we ever fought them."
"But I think China sees the threats to the world economy as even more immediate and relevant."
What he would like to see is China spending its leverage. "And I'd love to see Xi Jinping used a little bit of the tough love he's got with Putin or the potential for it to strongarm him into recognizing this war has been ridiculous and there are no benefits to anybody to continuing it."
He does not expect it, and the reason is mutual dependence. "Russia and China both feel they need each other against us, against the Western world. And ultimately, they've got each other's strategic backs."
They may quietly voice a different preference to each other and gently critique the other's policy moves, he said, but he does not think they will use leverage in any meaningful way
"China's not going to stop providing machinery to Russia with which it can build weapons or it's not going to stop buying Russian oil and gas."
"You know, I just don't think we're going to get much of benefit to us out of that meeting."
Santoli noted the reported American channel running in parallel: the CIA director flying to Moscow with the message that U.S. intelligence says Russia should look for a way out — "but who knows if that'll happen"
Iran Is Playing for the Fall, When Reserves Get Low Enough to Move Prices
Santoli said the Strait now looks like a standoff, and asked whether the world is approaching a critical point for reserves.
O'Hanlon said he can follow the Iranian logic even while disagreeing with it. "They know full well that we found a way to deal with the first six months of reduced oil and gas flows through the Strait with global reserves, China using less oil, etc., etc."
The bet is that the next few months are harder than the last six. "But there's also, as you're well aware, a lot of concern among economists and specialists in oil that this fall could be worse, that we could start really hitting the lower levels of strategic reserves and other kinds of issues could really drive prices much higher."
What Tehran would buy with that is bargaining position. "I think Iran wants to see if that happens and if that can then put them in a better position for any negotiations that happened down the road, whether it's overcharging tolls in the Strait of Hormuz or for their nuclear program or what have you."
Putin Is Too Dug In to Admit It, and O'Hanlon Cannot Say What He Is Fighting For
"I'm a little bit perplexed as to what Putin still thinks he's fighting for."
The obstacle he describes is psychological rather than strategic. So many people, including his own countrymen, have died that O'Hanlon called it a cognitive dissonance in which Putin cannot admit the war is stuck and has been a mistake
"And so he doubles and triples down."
"I just don't know what he's really hoping for. It's such a crying shame."
Santoli's closing line was that it is amazing how far the world has gotten used to that being the case
O'Hanlon's bottom line is that the wars in Ukraine and Iran are setting the terms for the world economy while the people who could end them are outside the room, and that the one country with real leverage over Moscow has decided not to spend it.
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