Energy

Sept. 1 (UPI) — Police in Brandenburg, Germany, said they found several improvised explosive devices at a coal-fired power plant in Tunow-Preilack, some of which hadn’t been detonated.

Bomb disposal experts from the State Criminal Police Office were able to diffuse the IEDs.

There were no injuries, police said.

Power company 50Hertz said there was a “brief interruption of service” but that all power lines were back in operation at the substation. It distributes electricity from the Jänschwalde, Germany, plant.

Brandenburg Police in Potsdam asked the public for information or witnesses who may have seen something on Tuesday morning.

Also on Tuesday, Germany accused Russia of responsibility for a drone attack at Leipzig’s airport last month and announced new measures against Moscow.

While it’s not yet known who placed the IEDs at the power substation, the German interior minister said Germany is, “a daily target of hybrid attacks.”

Borrowing costs across some of Europe’s biggest economies have surged to their highest levels in more than 15 years, as a renewed sell-off in global bond markets gathers pace.

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The global bond rout pushed Germany’s benchmark borrowing costs to a 15-year high on Tuesday, with France, Italy and the Netherlands all seeing similarly steep rises.

Germany’s 10-year Bund climbed above 3.36% on Tuesday, according to Trading Economics. Later, the yield went down a bit and traded at around 3.34%.

Bond yields move inversely to prices. When investors sell bonds, prices fall, and because a bond’s fixed interest payment becomes worth more relative to that lower price, the effective yield rises.

In short — the more bonds get sold, the more it costs governments to borrow.

Sovereign debt came under renewed pressure as rising oil prices and increasingly hawkish signals from major central banks reinforced bets that interest rates will stay higher for longer.

The yield on Germany’s 30-year Bund surged above 3.84%, also its highest level since 2011. The French 10-year OAT yield rose to its highest level since November 2008, trading slightly above 4.215% at around 10.45 CEST on Tuesday. The equivalent Italian yield was trading slightly lower at 4.188 at the same time.

At the same time, the Dutch 10-year government bond yield increased to 3.43%, its highest level since May 2011. Spain’s 10-year yield climbed above 3.80%, its highest level since November 2023.

Investors are concerned that rising energy prices will fuel inflation around the world, potentially prompting interest-rate increases by central banks in the US, Japan and the eurozone, among others.

These concerns were reinforced in the eurozone on Tuesday morning, as the latest flash inflation data from Eurostat showed that energy prices were 14.3% higher than a year earlier. This helped push eurozone inflation to 3.3% in August, up from 2.9% in July. This is significantly above the ECB’s 2% target.

The central bank is due to hold its next monetary policy meeting next week, and most investors are betting on a 25-basis-point rate hike.

Leo Barincou, senior economist at Oxford Economics, said: “With inflation still accelerating, the ECB is all but certain to hike at next week’s meeting, in line with our expectations.”

Looking at the largest European economies, analysts say Germany’s Bund has moved largely in line with global benchmarks, while France faces an additional risk premium because of its political and fiscal outlook.

French 10-year borrowing costs have exceeded Italy’s for much of the summer, as France increasingly replaces Italy as the main focus of European debt concerns.

According to the IMF, France’s gross government debt is projected to reach 118.4% of GDP this year and 120.5% in 2027. France currently has the third-highest debt-to-GDP ratio in the EU, after Greece and Italy.

The Banque de France expects the budget deficit to reach 5.2% of GDP this year. Difficult budget negotiations ahead of the 2027 presidential election have raised doubts about the government’s ability to reverse this trend.

Robert Timper, BCA’s chief fixed-income strategist, previously told Euronews Business: “We have held the view for some time that France is the country in the euro area with the most unsustainable fiscal outlook, and its borrowing cost should reflect that.”

“To get back to a sustainable fiscal path, France needs to do substantial reforms, which will be unpopular as they will curtail welfare spending,” Timper said. “A large political majority is therefore necessary for such reforms, or a bond market riot will force reforms.”

Global bond sell-off

Expectations of persistently high inflation and rising borrowing costs also pushed the yield on 10-year US Treasuries to its highest level since January 2025. The yield on the 10-year Treasury was trading at around 4.78% on Tuesday.

In the US, higher energy prices have added to already stubborn inflation, which remains well above the Federal Reserve’s 2% target. Inflation has weighed on household spending and consumer confidence, complicating the Fed’s decisions on interest rates.

According to Bloomberg, traders raised the probability of a September US rate hike to about 70%, extending a repricing that began last week when Federal Reserve Chair Kevin Warsh doubled down on a pledge to tame inflation.

The sell-off also spread to Asia, where Japan’s benchmark 10-year government bond yield reached 3.00% for the first time since 1996.

Government bonds have traditionally been seen as safe-haven assets during periods of uncertainty.

That role is being tested as investors become increasingly concerned that global conflicts and higher energy prices could produce a prolonged period of stagflation — a combination of high inflation and weak or zero economic growth.

Aug. 31 (UPI) — Oil prices surged early Monday after fighting flared in the U.S.-Iran conflict for the first time in four weeks since U.S. President Donald Trump announced a “pause” in U.S. military strikes on Aug. 1.

The contract for the benchmark Brent crude for November delivery jumped by 3.4% to $91.09 a barrel and the October contract for American crude saw a similar-sized increase to $86.22 after U.S. forces hit rocket launchers on Larak Island in the Hormuz Strait on Sunday night and Iran’s military retaliated, targeting American bases in Jordan.

The hikes were driven by the renewed hostilities stoking fears ongoing supply disruption caused by a drastic curtailment of tankers traffic transiting the Strait of Hormuz would be made worse and persist for longer, according to experts.

“Supply risk will persist and oil inventories will continue to deplete in the coming weeks and months. The Iranian crisis has likely changed the security status quo in the Middle East,” said PVM Oil Associates’ London-based analyst Tamas Varga.

Investment bank Goldman Sachs, the impact of destructive attacks on refining capacity was responsible for upward pressure on margins.

“Rising strikes on refineries in the Middle East and Russia have further constrained already-stretched global refining capacity, pushing refined products margins to new highs,” the bank said in a note.

Prices at the pump in the United States on Monday remained broadly flat from the previous day, with the average price of a gallon of regular unleaded up 0.2 cents at 4.08 a gallon, and diesel down by a little over 0.3 cents at $5.60 a gallon, according to the American Automobile Association.

The developments came as the United States’ Strategic Petroleum Reserve has fallen to its lowest level since 1982.

President Trump said Sunday he would restock it with oil from his Venezuela deal giving the United States secure a stake in more than 65 billion barrels of oil despite the fact it could to produce take many years to before the agreements yields any significant volumes because the oil is reserves, as yet to be drilled.

The price of oil has seesawed over the past two weeks after rising in response to Trump’s Aug. 19 threat to wage a “crushing economic operation” against Iran that his officials said would cause the regime to collapse, and then retreating again in the hours before the mainly-sanctions package of measures were unveiled on Aug. 24.

Six months into the war on Iran, the largest US oil companies have posted their biggest profits since 2022, selling less oil at far higher prices. But the conflict is also putting their longstanding Gulf investments at risk, exposing the industry’s uneasy balance between wartime gains and mounting geopolitical vulnerability for investors worldwide.

Since the war began on February 28, Brent crude has risen about 22 percent, from $72 to $88 a barrel.

The Strait of Hormuz – through which one-fifth of the world’s oil and natural gas was shipped before the war – remains largely closed to commercial traffic, though Iran and Oman agreed last week on a temporary maritime route. Iran says the strait will not fully reopen until the United States fulfils its commitments under a lapsed interim peace deal, leaving longer-term security and management arrangements unresolved.

In the absence of a lasting resolution, the disruption is likely to continue supporting higher energy prices and creating windfalls for producers, despite placing energy companies’ regional assets and future projects at greater risk.

Rahul Choudhary, vice president of Upstream Research at Rystad Energy, an independent energy research company, said the conflict has already reduced the amount of oil and gas US energy firms are drawing from the Gulf region.

“Overall we expect US companies’ share of gas supplies [from the region] to fall by around 40 percent this year compared to last year [and] the share of oil supplies to drop by 30-35 percent,” he told Al Jazeera.

While higher commodity prices have helped offset the immediate financial impact, Choudhary said prolonged disruption is likely to delay major projects and weigh on the future growth plans of US oil and gas companies with a presence in the region.

Who has profited?

The surge in the oil price since early March, when Iran first closed the Strait of Hormuz, has delivered a windfall for oil companies, but gains have been tempered by challenges in the Gulf.

Chevron has limited exposure to Arab Gulf supply disruptions, with the region accounting for just 5 percent of its total global output. The group reported its highest quarterly profit in six years of $12bn in adjusted earnings on July 31.

ExxonMobil, by contrast, has been far more exposed to disruption in the Middle East, with the closure of the Strait of Hormuz and Iranian attacks on US-linked infrastructure in the region affecting its operations in Qatar and the United Arab Emirates (UAE), which together account for 20 percent of its global equity upstream supply, according to Choudhary.

“We already saw in H1 [the first half of] 2026, the company’s upstream earnings dropped by around $1.3bn compared to H1 2025, due to lower upstream volumes from the Middle East. However, the shortfall was covered well by higher commodity prices,” Choudhary said.

The contrast highlights a broader divide between those US energy companies which have benefitted from tighter global supply – and the corresponding rise in the oil price – and those with assets, partnerships or operations in the Gulf at greater risk of disruption caused by recent attacks on energy facilities.

Where are US energy companies exposed in the Gulf?

The Gulf’s energy sector is dominated by state-owned giants such as Saudi Aramco, Abu Dhabi National Oil Company (ADNOC) and QatarEnergy.

Although these national oil and gas companies retain control over the region’s reserves and core infrastructure, US energy firms have carved out strategic positions across the region.

US companies generate revenue through stakes in production assets, joint ventures, production agreements, refining and petrochemical projects, as well as through long-term contracts to provide equipment, engineering and operational expertise.

ExxonMobil has some of the largest US commercial interests in the Gulf.

The company has been a major partner in Qatar’s LNG sector for decades, holding stakes in several QatarEnergy LNG joint ventures linked to the expansion of the North Field. The field is the Qatari section of the North Field-South Pars structure, the world’s largest natural gas field, which Qatar shares with Iran, where it is known as South Pars. ExxonMobil also holds an interest in the UAE’s Upper Zakum offshore oilfield alongside ADNOC.

Similarly, ConocoPhillips joined the North Field East (NFE) and North Field South (NFS) expansion projects with QatarEnergy in 2022 to increase export capacity at Ras Laffan.

The US group, Occidental Petroleum, has become one of the largest foreign producers in Oman, operating the Mukhaizna heavy oilfield, the country’s biggest producing oilfield. It also holds interests in UAE gas and pipeline projects.

Chevron maintains a smaller but strategically important Gulf footprint. Through Saudi Arabian Chevron, the company operates oil assets in the Saudi-Kuwait Partitioned Zone, including the Wafra field. In July, it said it was exploring potential routes to move Iraqi crude to Mediterranean export terminals, which could reduce reliance on the Strait of Hormuz.

Where have attacks on energy facilities taken place?

According to the Armed Conflict Location and Event Data (ACLED), a US-registered independent conflict monitor, Iran and Iran-backed groups in the region have carried out at least 172 attacks on nonmilitary infrastructure across the six Gulf Cooperation Council (GCC) countries since the US and Israel launched their war on February 28.

Energy infrastructure has been hit hardest, with oil and gas facilities, along with power plants and desalination plants, accounting for nearly half (48 percent) of all strikes on nonmilitary targets.

The UAE, Kuwait and Bahrain have suffered the highest number of successful strikes, with the majority aimed at oil and gas facilities.

Among the sites that have been struck are Kuwait’s Mina Abdullah and Mina al-Ahmadi refineries, the Bahrain Petroleum Company oil refinery, and ADNOC’s al-Ruwais Industrial City and the Habshan gas complex.

There have also been several strikes on Saudi Aramco facilities, most recently a drone strike on July 27 on the Abqaiq processing complex, one of the most critical nodes in Saudi Arabia’s oil infrastructure, processing more than seven million barrels of oil per day.

Nasser Khdour, Middle East assistant research manager at ACLED, said: “Oil and gas facilities, power plants and water desalination plants are likely to remain key targets for Iran because disruption to these sectors can increase economic pressure on Gulf states, while disruption to global energy supplies increases prices and pressure on the US during periods of escalation.”

In March, a drone attack close to the Saudi Aramco-ExxonMobil SAMREF refinery in Yanbu disrupted oil loading at the city’s Red Sea port. While the attack had only minimal operational impact, it highlighted the vulnerability of US-linked energy assets in the region.

Qatar’s Ras Laffan Industrial City, the world’s largest LNG export hub, which hosts major joint ventures between QatarEnergy, ExxonMobil and ConocoPhillips, also came under repeated attack in March, at one point forcing the plant to halt production entirely. In June, an explosion as a result of a “technical malfunction” on Qatar’s Barzan gas project, where ExxonMobil holds a stake, killed at least 13 people.

“In terms of gas assets being impacted, major blows have been [dealt to] companies [that are] part of LNG projects in Qatar: ExxonMobil and ConocoPhillips,” Choudhary said.

He added that ExxonMobil’s share of LNG supply from Qatar is expected to fall significantly this year to about four million tonnes compared with 13 million tonnes last year, while ConocoPhillips has also experienced reduced volumes to one million tonnes this year compared with 2.5 million tonnes last year.

The attacks on Qatar’s LNG infrastructure could have longer-term consequences. Damage to LNG trains at Ras Laffan could take years to repair, according to QatarEnergy, while delays to Qatar’s North Field expansion projects could push back planned supply growth.

“The attack on LNG trains 4 and 6 at Rasgas damaged roughly 13 million tonnes of capacity, which will take anywhere between three to five years to come back online with a total repair cost estimate of around $3bn,” said Choudhary.

He added that the second most impacted gas project has been the Shah gas project in the UAE, in which Occidental Petroleum has a 40-percent stake and where drone attacks in March caused a fire at the gas plant that halted operations.

The conflict has also affected ExxonMobil’s oil interests in the UAE, Choudhary said. Production from Upper Zakum, where ExxonMobil has a 28 percent stake, was reduced between March and May when export routes were disrupted, limiting the ability to move offshore crude.

Beyond the UAE, the most significant impact on US companies’ oilfield operations played out in Iraq. A drone attack hit the Sarsang oilfield in March, followed by an explosion at one of its storage facilities in April, together causing damage to the field.

Looking ahead, Choudhary said higher prices could support cash flows, but prolonged conflict risks could threaten future growth. ExxonMobil’s $10bn Upper Zakum and Qatar LNG expansions could face delays, while ConocoPhillips remains exposed through investments in higher-risk markets, including its planned 42-percent stake in BP’s Kirkuk operations in Iraq.

“For companies like Chevron and Occidental Petroleum, whose presence are in less volatile countries like Israel and Oman respectively, the impact of escalations will not be as severe, as we have not seen significant disruption in these countries,” said Choudhary.

US oilfield service companies in the Gulf

Oilfield service giants, including US firms SLB (formerly Schlumberger), Halliburton and Baker Hughes, provide drilling technologies, equipment and operational expertise across the Gulf, supporting Saudi Aramco, ADNOC and QatarEnergy.

For oilfield service companies, the outlook is mixed, according to Chinmayi Teggi, energy research analyst at Rystad Energy, a research group. While higher oil prices and energy security concerns could lift demand over time, near-term margins remain under pressure from higher logistical costs, supply-chain disruptions and delayed projects.

“For the Big Three (SLB, Baker Hughes and Halliburton), the conflict continues to weigh on regional revenues,” Teggi told Al Jazeera, adding that second-quarter Middle East revenues were down 8-10 percent compared with the previous year across the three companies, while higher oil prices meant revenues were higher in other geographies.

However, a recovery in suspended operations and production could help drive growth into 2027.

For US companies, therefore, the Gulf remains both an opportunity and a risk.

“The impact on US companies will depend on the extent of exposure and countries in which these companies are present,” Choudhary said.

Their investments have secured US access to some of the world’s most important oil and LNG projects, but the conflict has exposed the risk of operating in a region where energy infrastructure has become increasingly vulnerable to geopolitical conflict.

US President Donald Trump has repeatedly warned Iran against restricting access to the Strait of Hormuz, arguing that the waterway must remain open to global commerce.

But for companies with billions of dollars invested across the Gulf, the challenge isn’t just about keeping shipments moving – it is ensuring the infrastructure remains secure, they say.

US president says deal secures majority US control of more than 65 billion barrels of proven oil reserves in Venezuela.

The United States has struck a deal with Caracas that would give them control of some 65 billion barrels of Venezuela’s proven oil reserves, President Donald Trump has announced, while reviving the OPEC nation’s battered energy industry.

In a post on Truth Social, Trump said the “historic transaction more than doubles American oil reserves” and “will substantially lower gas prices for all Americans”.

“At my direction, Secretary of State Marco Rubio, and Secretary of War Pete Hegseth, working closely with Highly Respected Interim President of Venezuela, Delcy Rodriguez, and, through a partnership with private business, have secured majority US control of more than 65 BILLION BARRELS of proven Oil Reserves in Venezuela, at no cost to the American Taxpayer,” Trump wrote.

Venezuela’s interim President Delcy Rodriguez welcomed the deal, which is expected to bring about $209bn to the state’s treasury.

The announcement followed weeks of negotiations over an agreement that would give American companies long-term access to a group of Venezuelan oilfields and guarantee the resulting crude supply to the US.

Venezuelan officials are preparing to sign agreements next week granting new oil exploration and production rights to a number of companies, particularly US firms.

Sources previously told Reuters news agency that a lease model was under consideration, with fields potentially auctioned to US producers, but the arrangement could face legal and constitutional challenges in Venezuela, where the state retains control over core oil industry activities.

The new deal would represent a dramatic expansion of Washington’s role in Venezuela’s oil industry as the Trump administration seeks to revive the country’s production and secure more crude for US refineries. Venezuela holds the world’s largest proven oil reserves, but produces only 1.25 million barrels per day, far below its potential after years of underinvestment, mismanagement and sanctions.

Trump did not disclose the structure of the agreement, the fields or companies involved, nor how the US would exercise majority control over the reserves.

Secretary of State Marco Rubio described the agreement as a win for both countries, saying on X that it would secure stable, low-cost oil for the US and help lower petrol prices.

For Venezuela, Rubio said the deal would bring nearly $100bn in private investment, support thousands of high-paying jobs and help rebuild the country’s economy.

Order declares a national emergency over an ‘unusual and extraordinary foreign threat’ to the grid.

United States President Donald Trump has declared a national emergency over what his administration describes as security risks linked to foreign-made equipment used in the US electricity grid.

Trump signed an executive order on Wednesday that restricts the purchase and installation of certain foreign-produced equipment used in the bulk-power system.

The order cited an “unusual and extraordinary foreign threat” from foreign-made systems, saying they could create vulnerabilities for US national security.

The directive targets certain bulk-power system equipment as well as related software and digital capabilities that the Trump administration said could create cybersecurity or operational risks.

The Department of Energy has 120 days to publish formal rules implementing the policy. In the meantime, experts are watching utility companies, which face the enormous task of compiling an inventory list of equipment flagged by the Trump administration.

“Blocking new purchases is the easy part. Knowing what’s already running is where the real work starts,” John Bruggeman, virtual chief information security officer of the telecommunications company CBTS, told Al Jazeera. “Utilities running foreign-sourced grid equipment … have a live compliance clock starting today.”

The move is the latest effort by the White House to address potential foreign security threats against the grid. Last year, US experts reported finding undisclosed communication devices in some Chinese solar power inverters. In July, the Federal Communications Commission banned all new foreign-made power inverters designed with remote communication capabilities and operating within the electric utility grid.

Still, the order does not prohibit all foreign-made equipment used in the US electricity system. US Energy Secretary Chris Wright has been directed to establish conditions for the continued use and operation of affected equipment.

“The executive order establishes the authority to act,” Michael Centrella at the cybersecurity company SecurityScorecard, told Al Jazeera. “The difficult next step will be giving operators scalable, independent visibility into which assets and vendor relationships present the greatest risk without disrupting the reliability of the power system.”

A top Iranian official says Iran and Oman have agreed on a new temporary route for shipping in the Strait of Hormuz, but insisted that the waterway will not reopen until the United States fulfils its commitments under an interim peace deal signed in June.

The remarks by Kazem Gharibabadi, Iran’s deputy foreign minister for legal and international affairs, came on Tuesday, after Iran and Oman’s top diplomats held talks in Tehran to finalise the details of a phased framework for managing the strait.

Iran and Oman, both coastal nations on the strait, have been in on-and-off talks for weeks about controlling traffic through the strategic waterway, which handled one-fifth of global oil and liquefied natural gas shipments before the US-Israel war on Tehran began in February.

Most ⁠shipping in the strait has been shut down since then.

Gharibabadi, speaking on state television, said Iran and Oman had agreed the new route’s entry “would be through our territorial waters, and part of the exit route would also be through our territorial waters”.

The transit corridor would be seven miles (11.3km) wide, he said.

“The agreed-upon transit route with Oman is a temporary route,” he added.

Earlier on Tuesday, Iran’s Foreign Minister Abbas Araghchi met with his Omani counterpart, Badr Albusaidi, in Tehran to discuss the temporary navigation corridor as well as a project to clear mines from the strait, according to a joint statement.

Albusaidi said on X he hoped the countries would “soon announce” the corridor, adding that “future management of the strait and a permanent solution will follow in due course.”

Technical talks are planned to develop a long-term arrangement, including mechanisms for information sharing and navigational and security services, according to the statement.

Mines in Hormuz

The Strait of Hormuz became a flashpoint after Tehran responded to the US-Israel war by closing the waterway. It then announced a new shipping route through its territorial waters, bypassing the internationally recognised Traffic Separation Scheme adopted by the International Maritime Organization (IMO) in 1968. Tehran said that route had been mined.

Then in June, when Iran and the US signed a Memorandum of Understanding (MoU) to end the war, Oman and the IMO announced a new transit corridor in the Strait of Hormuz – backed by the US – that hugged the Omani coast.

Iran said the so-called southern route violated the MoU and launched attacks on ships using the corridor, resulting in the collapse of the interim deal.

Diplomatic efforts towards a broader peace deal have since stalled, and passage through the strait remains dangerous. An oil tanker was disabled by an unidentified projectile on Tuesday near Oman’s Ash Shishah, close to the strait’s entrance, the United Kingdom’s maritime trade watchdog said.

Gharibabadi, in his comments on Tuesday, said Iran would not consider the strait open despite the agreement with Oman.

He also dismissed a claim by US President Donald Trump that all mines had been cleared from the strait’s international waters, saying it was “only aimed at calming the markets”. He warned that US mine-detection vessels would become “very good targets” if they entered the area.

Gharibabadi insisted the US must fulfil its commitments under the MoU – including sanctions relief and the release of frozen Iranian assets – if it wants a return to the diplomatic track.

He also urged countries to resist US pressure over sanctions on Iran.

Trump had announced last week the “most crushing economic operation ever” against Iran, and threatened sanctions against any country that does business with it.

“We are urging countries not to succumb to American pressure regarding the sanctions that Washington wants to impose on us,” Gharibabadi said, adding that Washington was “mistaken about its ability to enforce its sanctions against our neighbours”.

He said an earlier US sanctions campaign under Trump had failed to achieve its goals and predicted new measures would meet the same fate.

“The new American sanctions are doomed to failure, and we have our own methods to counter them,” he added.

EXPLAINER

At least 145 countries have reported increases in petrol prices since the attacks on Iran by the US and Israel began on February 28.

Since the United States and Israel launched their war on Iran six months ago, petrol prices have risen in at least 145 countries, adding to the burden on consumers worldwide.

The figures are based on data from GlobalPetrolPrices, which tracks fuel prices in 170 countries and territories. Petrol prices in Myanmar rose the most, increasing by 56 percent from $0.77 per litre of 95-octane fuel on February 23 to $1.20 on August 17. Bhutan recorded the next-largest increase at 55 percent, followed by Cuba at 51 percent, the UAE at 50 percent and 48 percent in Nigeria.

In 25 other countries, most of them oil producers with heavily subsidised fuel, prices have either remained unchanged or fallen by single digits.

The table below lists the 145 countries where petrol prices at the pump increased over the past six months.

How higher fuel costs shrink your driving range

Before the war, the US national average for a gallon [3.78 litres] of regular petrol was $2.94. It now costs $4.09, an increase of 39 percent, according to AAA Fuel Prices, which tracks retail fuel prices for the American Automobile Association (AAA).

The extra cost directly affects how far people can travel. Before the war, $50 worth of fuel in the US could take a family sedan roughly 718 km (446 miles). Today, the same amount takes you about 536 km (333 miles) – 183 km less, a 25 percent reduction in driving distance.

That gap varies depending on where you live.

Set your country, car and budget below to see how far your money takes you. If you’re filling up in the US, you can also select a state and fuel grade.

How high oil costs drive up the price of food

Oil prices and food prices move in lockstep, with energy prices affecting every stage of the food supply chain, from the fertilisers used in the fields to the trucks that carry food from field to supermarket shelf.

Rising oil prices also directly impact shipping and the cost of transport.

“The lifeblood of the global economy is transport,” economist David McWilliams told Al Jazeera. “It’s getting stuff from A to B – it’s a logistics problem, a supply chain problem and ultimately transportation is the energy of the global economy.”

In lower-income countries, where populations spend a far greater share of their earnings on food and import large quantities of grain and fertiliser, rising oil prices could rapidly translate into food shortages.

What products are made from oil and gas?

Oil and gas are used for far more than just fuel. They are raw materials for thousands of everyday products.

Plastics, including water bottles, food packaging, phone casings and medical syringes, are all derived from crude oil.

Crude oil is also the hidden ingredient in synthetic fabrics, such as polyester, nylon and acrylic, which are used to make everything from sportswear to carpets. It also underpins the cosmetics industry, as it is used to make products such as petroleum jelly (Vaseline), lipsticks and concealers.

Household items also rely on oil-based ingredients, with laundry detergents, dishwashing liquids and paints all derived from petroleum products.

The global food supply is essentially built on natural gas in the form of fertilisers, used to enhance crop yields and ensure that food production can meet demand.

Naivasha, Kenya – For communities living around Naivasha, water is not an abstract resource. It sustains families, livestock, farms and schools.

That reality has taken on new significance after plans for a major Microsoft-G42 data centre in Olkaria, near Lake Naivasha, stalled in May 2026 over concerns about available power capacity.

Microsoft and United Arab Emirates-based artificial intelligence company G42 announced the project in 2024 as part of a $1bn digital investment package for Kenya. The proposed facility was to run on geothermal energy and eventually scale to as much as 1 gigawatt of capacity.

The uncertainty has also prompted questions about what another major industrial user could mean for water in a region where residents already report shortages.

Microsoft and G42 said the proposed data centre campus would run entirely on renewable geothermal energy and incorporate water conservation technology. The companies did not disclose a project-specific water consumption figure in their 2024 announcement.

Kenya Electricity Generating Company (KenGen) communications director Frank David Ochieng told Al Jazeera that the data centre remains at the design stage and that he could not comment further until the project is ready to proceed.

For residents like Musa Olorkedienye, who spoke to Al Jazeera, water scarcity is already a daily concern. He says communities around Olkaria have seen changes in access to water, including the loss of reliable piped supplies that residents previously received from KenGen.

“Currently, we are relying on water vendors to get water, our animals are walking for kilometres, and we fear things could get worse as demand for water rises,” Olorkedienye says.

Pastoralist Isaac Leshishi, who also spoke to Al Jazeera, says increasingly harsh weather is adding to the pressure.

Why Olkaria?

The choice of Olkaria was closely tied to energy. The area is home to Kenya’s major geothermal operations, making it an attractive location for a power-intensive facility.

KenGen operates the Olkaria geothermal complex, while Microsoft and G42 planned to power the proposed data centre entirely with geothermal energy.

A lake under pressure

Naivasha is a freshwater lake in Kenya’s Rift Valley whose catchment supports agriculture, tourism, livestock and domestic water use. Its basin also hosts geothermal development and other economic activity.

Grace Kimani, a patrol leader with Lake Naivasha and Oloiden, told Al Jazeera that the reservoir is under growing pressure from population growth, agriculture, water abstraction, climate variability, pollution and ecosystem degradation.

“The planned Microsoft-G42 data centre in Olkaria could bring jobs and investment, but its water demand raises concerns about adding pressure to already competing needs, particularly during dry periods,” she said.

Kimani said there is limited public information about the project’s expected water demand, source and cooling technology. She said transparency and an assessment of its cumulative impact on water resources would be important.

She also called for water-efficient or water-free cooling, water recycling and the use of treated wastewater, as well as sustainable abstraction limits and community involvement in monitoring.

Silas Wanjala of the Lake Naivasha Riparian Association, who spoke to Al Jazeera, said the region is heavily dependent on groundwater and that declining water flows are adding to the pressure.

“These industries, especially EcoCloud, which deal with data, will consume a lot of water at a time when rivers are drying, and demand for water is on the rise,” Wanjala said.

Olkaria EcoCloud Data Centre is a local partner in the G42-led development. In 2024, the Kenya News Agency reported that G42, Microsoft and EcoCloud signed a letter of intent for the wider data-centre initiative, with EcoCloud described as a local partner that had previously signed a memorandum of understanding with G42.

Wanjala points to past fluctuations in Lake Naivasha as a warning.

“This lake in 2010 nearly dried up due to over-abstraction, and this could be repeated due to high demand for water by these investors in Olkaria,” he says.

His concern comes against a wider backdrop of water scarcity in Kenya. The Food and Agriculture Organization (FAO) of the United Nations says Kenya has about 527 cubic metres (527,000 litres) of freshwater available per person, below the 1,000-cubic-metre threshold for water scarcity, and estimates availability could fall to about 475 cubic metres per person by 2030.

The figures do not show what effect the proposed data centre would have on Lake Naivasha. They provide context, however, for why the prospect of another major water user is drawing scrutiny in a region where demand is already high.

How much water would it use?

The amount of water the proposed Microsoft-G42 facility itself would require remains unclear.

The project announcement provides no projected consumption figure.

Existing industrial use offers some context.

A KenGen environmental and social impact assessment records that 195,165 cubic metres of water were abstracted from Lake Naivasha in July 2023 for domestic and commercial uses at Olkaria and for operations and domestic use at Eburru.

Of that total, 153,918 cubic metres were used for commercial operations at Olkaria. The assessment records the abstraction as within Water Resources Authority (WRA) permitted levels.

Those figures relate to existing KenGen operations, not the proposed data centre.

For farmer Eskimos Kobia, who spoke to Al Jazeera, the potential competition extends beyond households and livestock. He says farmers, pastoralists, schools and investors will all face greater pressure as demand increases.

Kimani said climate variability has also led to fluctuations in lake levels, with periods of flooding followed by prolonged dry conditions.

“Water quality is affected by agricultural run-off, untreated wastewater in some areas and invasive species,” she says.

Investment versus local concerns

Not everyone in Naivasha opposes the investment.

Absolom Mukhuusi of the Naivasha Professional Association, who spoke to Al Jazeera, says the technology sector could bring jobs, infrastructure and new businesses to the area. But he says economic benefits should not come at the expense of local communities.

“Even as we welcome the investors, our biggest fear is what happens to our water bodies and communities as water is diverted to Olkaria for the heavy users,” he says.

Could technology help?

Geologist Kenyatta Otieno, who spoke to Al Jazeera, sees another potential benefit.

He recalls the pressure large flower farms once placed on the lake’s ecosystem, saying many have since left or scaled back their operations.

Otieno says the proposed centre would have included a resource centre to monitor lake levels and weather patterns. Such monitoring, he says, could help identify the highest water level over time and guide riparian land zoning.

“The centre being built with water conservation in mind would be futuristic as Naivasha is generally a water-scarce area. It would be a model for future development,” Otieno said.

Kenya already has regulators responsible for managing competing demands. The WRA regulates water abstraction and issues water-use permits, while the National Environment Management Authority (NEMA) oversees environmental impact assessments under the country’s environmental regulatory framework.

Attempts by Al Jazeera to obtain comments from WRA and NEMA officials were unsuccessful. Efforts to reach Microsoft-G42 officials and Kenyan government officials for comment on the project’s status and water requirements were also unsuccessful.

For now, the project’s eventual scale, design and water requirements remain unclear, according to KenGen.

“We are now competing with the multibillion [-dollar] companies for water, and we fear that we shall be the losers in the long run,” Leshishi said.

For years, the day in Kulak ended when the generator powered down. Like thousands of villages across Iraq, this small farming community in the semi-autonomous Kurdistan region lived to the faltering rhythm of an erratic power supply: a few hours of electricity, then the water pumps stopped, refrigerators warmed and children put down their books.

Today, Kulak runs on the sun. Solar panels harness its energy, batteries store the excess and residents have power 24/7. The change is visible beyond the homes: water pumps keep running, and cold storage gives farmers more control over when they sell their harvest.

This is the part of the energy transition the global climate conversation too often overlooks. Solar hardware is cheap; the world has learned how to install it. What matters is what comes after the panels go up: building the local capacity to keep the systems running and using reliable power to support farms, livelihoods and communities.

The energy transition will not be won in conference halls. It will be won, or lost, in places like Kulak.

Iraq’s rural energy crisis

Iraq’s energy story is usually told as a paradox. It is one of the world’s great oil producers, yet rural communities still endure daily power cuts. Summers now regularly push past 50 degrees, and the United Nations ranks Iraq among the nations most vulnerable to climate change. Drought has emptied farmland. Heat has made whole regions harder to live in. Rural families face a quiet, grinding choice between staying on land that can no longer sustain them or joining the drift towards overcrowded cities.

These pressures do not respect provincial boundaries. They are shared across Iraq, from the marshes of the south to the mountains of the north. They demand responses that work for the whole country.

For remote communities, decentralised power should not simply be treated as a stopgap while they wait for the grid. It can be part of the long-term answer.

Beyond electrification

Kulak is one of five villages in the Kurdistan region electrified through a solar initiative that pairs new infrastructure with local training and agricultural development. Residents are trained to operate and maintain their own systems, while research is under way into how reliable power can support local production.

Energy is treated not as a gift to be received but as an asset to be managed. That means looking beyond electricity itself to what it can enable: cold storage that allows farmers to hold their harvest for better prices, irrigation that no longer depends on diesel and processing that adds value before crops ever leave the village.

That distinction matters, because the graveyard of development is full of well-intentioned infrastructure. Anyone who has worked in this field has seen the solar array gathering dust because no one was trained to fix an inverter, or the water project abandoned when the foreign NGO moved on.

Sustainability is not a slogan; it is a design choice. Building local capability into a project from day one is the difference between a photo opportunity and a future.

Building the transition from the ground up

There is a broader argument here for the climate movement.

The energy transition is overwhelmingly narrated from the top down: through COP plenaries, G7 communiques and the financing pledges of wealthy nations, many of them unmet. Yet for hundreds of millions of people in the Global South, the transition will arrive, if it arrives at all, through decentralised solutions built close to the ground.

Rural Iraq will not wait decades for grid expansion to reach every valley. It does not have to. Distributed solar suits these communities better than centralised generation ever did, while local institutions can move at a speed that multilateral programmes rarely match.

There is also a quieter point about who gets to act on climate.

The prevailing image of climate action in the Middle East is the megaproject: vast desert solar farms, futuristic cities and sovereign wealth funds. Those have their place. But electrifying farming villages one by one represents a different kind of ambition, one rooted in the belief that Iraqis themselves, in all their diversity, can build the country’s energy future rather than wait for it to be delivered.

Local involvement matters particularly in places where reliable electricity is tied not only to household comfort but to whether farms can irrigate crops, preserve produce and remain economically viable.

Iraq has thousands of rural communities, and scaling this model will require partners, patient financing and supportive policy at every level of government. The agricultural research is promising but young.

On my last visit to Kulak, I was struck less by the panels than by what surrounded them: the cold store, the working pumps, the sense of a community planning for next season rather than next month.

The lights staying on is the least of it. What has really been switched on is the future tense.

If Iraq’s energy transformation is built like this across the whole country, village by village and from the ground up, it will be more durable than anything imposed from above. That means investing not only in the systems themselves, but in the people who will maintain them and the farms, businesses and livelihoods that reliable power can support.

The world’s climate diplomats could do worse than pay attention.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

The Iran war has pushed the global energy system into a deeper crisis, with the disruption increasingly shifting from crude oil supplies to the refined fuels that power transportation, industry and economies worldwide.

While global oil markets have adapted relatively well to the loss of a significant share of Middle Eastern crude production, the refining industry has had far fewer options to compensate.

That imbalance is already visible in fuel prices.

Brent crude is around $90 a barrel, roughly 25% above its level when the conflict began on February 28 but well below its wartime peak of $118.

Refined fuel prices, however, have remained much higher. European diesel prices have risen more than 70% since the start of the war, while U.S. gasoline prices have increased around 60%.

The growing divergence suggests that the biggest energy shock may no longer be coming from crude oil itself, but from the world’s ability to turn crude into usable fuel.

Why Are Fuel Prices Rising Faster Than Oil?

The key problem is declining refinery capacity.

The International Energy Agency estimates that more than 20% of the Middle East’s 9.6 million barrels per day of refining capacity was knocked out during the conflict.

At the same time, the closure of the Strait of Hormuz has restricted fuel exports and disrupted the movement of Gulf crude.

The result has been a chain reaction.

Refineries, particularly in Asia, have had to reduce operations because of difficulties obtaining crude, while damaged Middle Eastern facilities have struggled to return to normal production.

This has created a shortage of diesel, gasoline and other refined products even as crude oil prices have retreated from their wartime highs.

How Has Russia Made the Fuel Crisis Worse?

The Middle East is not the only source of disruption.

Months of Ukrainian attacks on Russian energy infrastructure have also reduced global refining capacity.

Russian refinery throughput has fallen by nearly 30% in recent months to below 4 million barrels per day.

The decline has forced Moscow to restrict diesel exports, removing another major source of refined fuel from international markets.

The combination of Middle Eastern refinery damage and reduced Russian output has left the global market with fewer alternatives.

That is particularly important for diesel, which is essential for freight transportation, agriculture, construction and industrial activity.

Why Are Diesel Refining Margins Surging?

The shortage is reflected in refining margins.

European diesel refining margins have more than tripled since February, rising above $75 a barrel.

U.S. diesel margins have increased more than 140%, reaching a record $100 earlier this week.

These figures demonstrate how severe the shortage has become.

Refineries capable of producing diesel and other fuels are commanding exceptionally high margins because demand remains strong while available capacity is shrinking.

The problem is that simply increasing refining margins does not immediately create new refining capacity.

Building or repairing refineries can take months or years, particularly when specialised equipment is required.

Have Global Fuel Inventories Been Depleted?

Yes, and that could become one of the biggest problems in the months ahead.

Fuel stockpiles provided an important buffer when the conflict began.

That buffer is now largely gone.

According to the U.S. Energy Information Administration, global oil inventories fell at a rate of around 3.5 million barrels per day between March and July.

Stocks are expected to continue declining through the end of the year.

U.S. diesel inventories are already at their lowest seasonal level in three decades, while gasoline stocks are at their weakest seasonal level since 2012.

This leaves the market increasingly exposed to any additional disruption.

Is There a Global Fuel Production Shortfall?

The data suggests there is.

Global refinery runs during the second quarter were 5.1 million barrels per day lower than a year earlier, according to the IEA.

High fuel prices have reduced consumption, with demand for refined products falling by around 4 million barrels per day.

But that reduction has not been sufficient.

The result was still a shortfall of more than 1 million barrels per day.

The imbalance could become even worse during the third quarter.

Refinery runs are expected to remain 4.1 million barrels per day below last year’s level, while demand is projected to fall by only 2.4 million barrels per day.

In other words, fuel supply is declining faster than demand.

Would Reopening the Strait of Hormuz Solve the Crisis?

Not necessarily.

A diplomatic breakthrough between Washington and Tehran that permanently reopened the Strait of Hormuz could send crude prices sharply lower.

But cheaper crude would not automatically translate into cheaper gasoline and diesel.

The reason is that the refining infrastructure itself has been damaged.

More than 20 Gulf refineries suffered damage during the war, and many require extensive repairs.

Crucial equipment such as compressors, heat exchangers and specialised catalysts can take significant time to obtain.

Lead times for some of these components were already stretched before the conflict.

Consequently, even if crude shipments resume quickly, refinery capacity could remain constrained for much longer.

Why Is China Important to the Energy Crisis?

China’s response could have a major impact on global fuel markets.

China is the world’s second-largest refining centre and sharply reduced refinery processing rates and fuel exports during the conflict.

If Beijing keeps exports limited, the international market will lose another potential source of refined products.

Conversely, an increase in Chinese refinery utilisation and exports could provide some relief.

But China must also balance domestic fuel demand, inventory requirements and its own energy security.

That makes its decisions particularly important for Asia and the wider global market.

Could the Energy Crisis Fuel Global Inflation?

The answer could be yes.

The immediate impact of higher fuel prices is already appearing in inflation data.

U.S. consumer prices rose 3.4% year-on-year in July, with energy costs increasing 14.7% and gasoline prices rising 24.6%.

Euro zone inflation accelerated to 2.9%, driven partly by a 10% increase in energy costs.

Japan’s producer price index rose 7.2% in July.

These figures raise concerns that the energy shock could spread beyond fuel markets.

Higher transportation costs increase the cost of moving goods, while expensive diesel raises costs for agriculture, manufacturing and logistics.

If those increases persist, businesses may eventually pass them on to consumers.

Why Could the Energy Crisis Last for Years?

The central problem is that refining capacity cannot be restored as quickly as crude production.

Oil wells can continue producing once transportation routes reopen.

Refineries, however, require complex infrastructure, specialised machinery, skilled workers and maintenance.

If damaged facilities need major reconstruction, restoring capacity could take years.

At the same time, depleted fuel inventories will eventually need to be rebuilt.

That means refiners could face sustained pressure to process more crude even after the immediate crisis ends.

The result could be a prolonged period of elevated refining margins and fuel prices.

What Does This Mean for Europe and Asia?

Europe and Asia could face particularly severe pressure.

Both regions rely heavily on imported energy and have already experienced increases in refined fuel and liquefied natural gas prices.

For European economies, expensive diesel could increase transportation and industrial costs.

For Asian economies, disruptions to Gulf crude supplies and reduced Chinese fuel exports could create additional pressure.

The combination of higher fuel and LNG prices could therefore create a broader energy inflation shock rather than an isolated oil-market disruption.

Could Consumers Eventually Reduce Demand?

Demand destruction remains one of the few mechanisms capable of restoring balance.

If fuel prices remain extremely high, consumers may drive less and businesses may reduce transportation and energy consumption.

Companies may also delay investment and cut production.

That could eventually reduce demand enough to ease pressure on the refining system.

But demand destruction carries an economic cost.

A reduction in fuel consumption caused by efficiency improvements is very different from a decline caused by households and businesses being unable to afford energy.

The latter can slow economic growth while inflation remains elevated.

Analysis: Why the Refining Crisis May Matter More Than the Oil Shock

The most important lesson from the Iran war energy crisis is that the global energy system is not simply dependent on how much oil exists, but on whether the world can refine and transport that oil into usable fuel.

The crude market has shown considerable resilience.

Refined fuel markets have not.

That distinction could determine how long the current energy shock lasts.

Even if diplomacy reopens the Strait of Hormuz and crude prices fall, damaged refineries, depleted inventories and reduced Russian exports will continue to constrain fuel supplies.

This creates a particularly difficult situation for central banks.

If energy prices rise temporarily, policymakers can theoretically look through the shock. But if fuel shortages persist for months or years, higher transportation and production costs can become embedded across the economy.

That would make the assumption of a short-lived inflation shock increasingly difficult to defend.

The depletion of global inventories is perhaps the biggest warning sign.

Stockpiles normally provide a cushion against geopolitical disruptions. That cushion has now been significantly weakened.

As a result, another major refinery outage, shipping disruption or escalation in the Middle East could produce a much larger price response than it would have before the war.

The world therefore faces a dangerous mismatch: crude supplies may recover faster than the infrastructure needed to turn them into fuel.

That is why the energy crisis could outlast the war itself.

The Iran conflict may have started as a crude oil shock, but its most consequential economic legacy could be a prolonged global shortage of refined fuels, keeping inflation and energy costs elevated long after the fighting ends.

With information from Reuters.

Crude oil and natural gas supplies have been disrupted worldwide by the United States-Israel war on Iran, but one energy sector appears to be cashing in – coal.

This week, South Africa’s thermal coal producer Thungela Resources said it had doubled its half-year profits as the war has forced more countries to buy the fuel.

Although abundant and relatively cheap to produce, coal is considered one of the dirtiest fossil fuels.

Mining it causes water pollution, and burning it releases enormous amounts of carbon into the atmosphere, which contributes to global warming.

In recent months, several countries, especially in Asia, have reversed or delayed promises to scale back on coal production.

Global coal consumption was already rising in 2025 with the Eurasia region and the US using the fuel to power artificial intelligence data centres, according to the World Bank.

Here’s what we know:

Why is more coal being used?

The US-Israel war on Iran has triggered a global energy crisis. Soon after strikes on Tehran began on February 28, Iran closed the Strait of Hormuz, through which about one-fifth of the world’s oil and liquefied natural gas (LNG) supplies were shipped during peacetime.

Negotiations to reopen the strait are ongoing.

Its closure has reduced oil and gas supplies and caused oil prices to soar, prompting many countries to fall back on the most readily available alternative to keep the power on – coal.

While coal prices have also risen, the fuel is still much cheaper than oil – and is more readily available.

No region has been more impacted than Asia, which largely depends on the Gulf for its energy needs. About 82 percent of oil and gas shipments through the Strait of Hormuz went to Asia in 2022, according to the US Energy Information Administration. China, India, Japan and South Korea were the top destinations.

Besides being unable to ship exports through the strait, Gulf countries caught up in the conflict have also been badly impacted by Iranian strikes. Qatar, for example, was forced to declare force majeure on its delivery contracts in March when Iranian drones hit its Ras Laffan oil facility – the world’s largest LNG complex – forcing it offline. Iran’s attacks had knocked out 17 percent of Qatar’s LNG exports by March, state officials said.

Similarly, the United Arab Emirates’s Das Island LNG terminal, Fujairah oil terminal, Ruwais Refinery Complex and other energy sites have been attacked during the conflict. Facilities in Saudi Arabia and Oman have also been hit.

Where has coal use increased?

According to an analysis by the energy data company Ember, coal output will rise globally by 1.8 percent by the end of 2026 compared with 2025 in a “worst-case” scenario.

This represents a notable uptick considering that countries are meant to be transitioning away from coal, experts said.

Since the war began, several Asian countries have announced plans to increase coal-fired electricity generation.

Japan has lifted restrictions on older, high-emission coal plants to cope with the energy shocks while South Korea has delayed the shutdown of coal-powered plants it promised to wind down by 2040.

In Bangladesh, the government at first imposed power cuts, closed universities and rationed fuel sales for vehicles before announcing it had ramped up coal-powered electricity generation.

Thailand, the Philippines and Vietnam have also increased coal-powered electricity generation to preserve dwindling gas reserves.

In Pakistan, data from the National Electric Power Regulatory Authority showed that by July, electricity generated from imported coal had risen by 90 percent compared with the same period the previous year.

China and India already consume 70 percent of the world’s coal and are also major producers. In India, where electricity demand is increasing partly due to more intense heatwaves, the government plans to launch several new coal-mining projects that will see global supplies increase by 2.5 billion tonnes a year, according to the Global Energy Monitor.

Germany also said it won’t jeopardise electricity generation because of earlier climate promises it made while Italy has pushed back its coal phase-out plans from late 2025 to 2038.

Who is making a profit from coal?

Indonesia is the top coal exporter by a wide margin, followed by Australia and Russia.

In March, Jakarta reversed previous plans to curb coal production and reduce oversupply in a bid to benefit from the rising prices. Prices were set at $131.85 per tonne in July, compared with $102.20 in the previous year.

South Africa’s Thungela, meanwhile, reported doubled profits from January to June, compared with the same period of 2025, driven largely by higher production from its Ensham mines in Queensland as well as higher demand and higher prices at both Ensham and its South Africa operations.

Production at Ensham rose by 38 percent in the first half of the year – during the peak of the conflict – to 2.2 tonnes, compared with 1.6 tonnes in the previous period.

The company reported 4.80 South African rand ($0.30) in headline earnings per share – or HEPS, a primary metric of profitability used in South Africa. That’s up from 1.92 rand ($0.12) in June last year.

In a statement, Thungela said prices will likely remain high as European and Asian markets prepare for winter.

What does this mean for the drive for clean energy?

In 2021, more than 40 countries, including Indonesia and Vietnam, promised to scale back coal use at the COP26 global climate summit. India and China did not sign up, however. Last year, South Korea joined the Powering Past Coal Alliance, which helps coal-dependent economies transition away from the fuel.

However, the Middle East crisis has upset those plans largely because many countries do not have sufficient renewable energy-generating capacity to fall back on, said Nick Hedley, an energy transition analyst at South Africa-based Zero Carbon Analytics.

“For the likes of Bangladesh, it’s easy to lift coal use when global gas supplies are disrupted because the country invested heavily in coal infrastructure in recent decades, and much of that capacity has been sitting idle,” he said.

“Coal becomes cheaper than imported gas when gas prices surge. Importantly, coal still cannot compete with renewables on cost,” Hedley added.

It’s not all doom, however. Analysts noted that upticks in some places are being offset by long-term declines in coal use in places like Europe.

China’s domestic coal production also fell this year as the government tightened oversight following a deadly explosion in May at the Liushenyu coal mine, where 82 people died. Beijing has also made large investments in renewables.

In addition, the breakdown of global fossil energy supply chains could make clean alternatives more competitive and force more countries to invest in them, Hedley pointed out.

“The lesson here is that Asian countries need to speed up their shift to clean energy and electrification to safeguard themselves against future global crises,” he concluded.