Iran’s Security Crackdown Runs Into Resistance From Within

By RFE/RL staff - Sep 12, 2026

• Iran’s parliament is considering sweeping restrictions on contacts with foreign media, universities, organizations, and other overseas entities.
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• Parliament Speaker Mohammad Baqer Qalibaf supports stronger counter-infiltration measures but says requiring security approval at every stage could effectively “lock the country down.”
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• Pezeshkian’s government, some lawmakers, academics, and UN experts have pushed back, warning of restrictions on rights, scientific isolation, and further brain drain.
• 
  

Iran's parliament is trying to turn fears of foreign infiltration into law. But as lawmakers work through the legislation, the debate is exposing an increasingly awkward question for the Islamic Republic: How far should the state go in policing Iranians' contact with the outside world?

At the center of that debate is Parliament Speaker Mohammad Baqer Qalibaf, who, at least publicly, is doing a balancing act. He has defended the need for tougher measures against foreign infiltration while warning that the current draft of the legislation goes too far.

"No patriot opposes countering foreign infiltration," Qalibaf said during a recent parliamentary session. But, he added, lawmakers needed to ensure that people's "rights, their lives, and their trade" were not affected.

He said security agencies may need to be able to vet Iranians' contacts with foreigners but that they cannot demand permission at every stage.

"They say they want to be certain, to have permission sought from them at every stage," the conservative speaker said. "That's not possible, because then we'd have to lock the country down."

That balancing act gets to the heart of a bill that was conceived as a wartime response to genuine security failures. The two recent wars exposed how deeply Israeli intelligence had penetrated Iran and prompted calls for tougher measures to identify and prevent foreign influence.

But what began as a security response has evolved into a much broader fight over the boundaries of the Islamic republic's security state.

The bill, formally called the Plan To Counter The Infiltration Of Intelligence Services And Foreign Governments Or Institutions but commonly referred to as the "infiltration bill," would require Iranians to obtain prior approval from the Intelligence Ministry and the Islamic Revolutionary Guards Corps (IRGC) Intelligence Organization before engaging in a sweeping range of activities.

Those activities include publishing books or articles, academic cooperation, interviews with foreign media deemed "hostile," and participation in scientific conferences or arts festivals. The bill also includes provisions criminalizing interviews, discussions, and other communication with media deemed hostile, as well as sending photographs, videos, audio, or other material to foreign media, with violations punishable by prison terms of up to two years.

Parliament approved the bill's general framework in mid-August by a lopsided 183-4 vote. The draft has since expanded from 19 to 33 articles as it has moved through the National Security and Foreign Policy Committee.

Only its first two articles have so far cleared the floor, while the remaining provisions remain subject to revision. Even if parliament approves them, the bill will still require Guardian Council approval before it can become law.

The political resistance, however, has already begun.

Qalibaf has sent two of the bill's most consequential provisions -- Articles 7 and 8, which deal with the disclosure process and penalties for exceeding the scope of a permit -- back to the committee because of ambiguities.

Qalibaf has insisted that parliament must address the security agencies' concerns, saying their "needs" would be met "within reasonable bounds." But he has rejected the idea that the Intelligence Ministry and IRGC Intelligence Organization should effectively have the power to approve Iranians' foreign contacts at every turn.

He has also dismissed suggestions that the bill should be shelved at the government's request.

When First Vice President Mohammad Reza Aref claimed Qalibaf had privately promised to stop the legislation, an MP repeated the allegation on the parliamentary floor. Qalibaf rejected it, stressing that parliament is not "a branch of the government."

The result is a political fault line that does not fit neatly into Iran's usual hardliner-versus-reformist divide.

Some lawmakers have been far more openly hostile to the bill. Mohammad Mehdi Shahriari, a member of the National Security and Foreign Policy Committee, called it "completely at odds with national interests."

He said it had been drafted too hastily by inexperienced lawmakers rather than the state's own security establishment and suggested Qalibaf's presiding board was itself now "strongly opposed" to the legislation.

The government of President Masud Pezeshkian has also publicly opposed the bill.

Hossein Afshin, the vice president for science, technology, and the knowledge-based economy, warned the current draft could isolate Iran's academic and research community and lead to "scientific stagnation." He pointed to the risks of an accelerated brain drain and additional obstacles for Iranian scientists working or studying abroad.

Conservative commentator Mohammad Mohajeri, editor of Khabar Online, made much the same point more sarcastically, writing on X that just as the government was trying to persuade Iranians living abroad to return home, parliament was giving elites, scholars, and students fresh reasons to leave.

The controversy has also attracted international criticism.

On September 3, the UN Independent International Fact-Finding Mission on Iran called for the bill to be withdrawn, warning it could further restrict fundamental freedoms and isolate Iranians from the international community. UN Special Rapporteur on Iran Mai Sato separately warned that Iranian intelligence agencies should not become "the gatekeepers of Iranian people's contact with the world."

For Iran's political establishment, however, the more immediate problem may be closer to home.

Few in the system appear willing to dispute that foreign infiltration is a genuine security threat. The argument is increasingly over what should follow from that threat and where the state should draw the line.

By RFE/RL

Why More Homes Are Switching From Gas to Heat Pumps

By Felicity Bradstock - Sep 12, 2026

• Heat pumps can deliver several times more heat energy than the electricity they consume and can substantially reduce fossil-fuel use.
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• U.S. heat-pump shipments remain strong despite the expiration of a federal tax credit at the end of 2025.
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• New technology and the ability to provide cooling are broadening heat pumps’ appeal in markets including the U.S. and U.K.
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Heat pumps are becoming an increasingly popular alternative to gas-powered central heating systems and are increasingly being used in new construction, often driven by government incentives. A heat pump uses technology similar to that found in a refrigerator or an air conditioner, extracting heat from a source, such as the surrounding air, and amplifying and transferring the heat to where it is needed. As most of the heat is transferred rather than generated, heat pumps are far more efficient than conventional heating technologies such as boilers or electric heaters, and are often cheaper to run.

Heat pumps have a compressor and a heat exchanger. In buildings, heat is usually dispersed via radiators or under-floor heating. Heat pumps can be connected to a tank to produce sanitary hot water. They can also be used for cooling purposes in the summer, thereby reducing reliance on air conditioners. In industry, heat pumps are used to deliver hot air, water or steam, or to directly heat materials. The heat energy output is typically far greater than the electricity required to power the heat pump, making existing models three to four times more energy efficient than gas boilers.

In countries that are still heavily reliant on fossil-fuel-generated electricity, heat pumps continue to contribute to carbon emissions. Over one?sixth of global natural gas demand and one-third of the European Union’s demand is for heating in buildings. Heating in buildings is responsible for 4 gigatonnes of carbon emissions a year, or around 10 per cent of global emissions.  However, when heat pumps are powered by electricity from renewable energy sources, they become a green heating and cooling system. This means they can help shield users from fossil fuel price volatility. 

In 2021, approximately 10 per cent of global space-heating needs were met by heat pumps, with global sales increasing by almost 15 per cent that year, double the average of the last decade. Some countries have already widely adopted heat pump use, such as Norway, where 60 per cent of buildings are equipped with heat pumps, as well as Sweden and Finland (over 40 per cent). This has helped undercut the argument that heat pumps are unsuitable for cold climates. 

As uptake continues to increase, particularly in regions such as the European Union, researchers are continually improving heat pump technology to make them cheaper and more efficient. 

In the United States, heat pump sales have doubled over the last 15 years, according to a recent report. Heat pumps outpaced natural-gas furnaces by 32 per cent in the first quarter of 2026, even after a tax credit for heat pumps concluded at the end of last year. People who installed heat pumps were previously eligible for up to $2,000 in tax credits. However, “It appears that the U.S. market for heat pumps is strong enough that it does not depend on tax credits,” Lucas Davis, an energy economist and UC Berkeley professor, wrote in a new analysis.

In Massachusetts, the Boston-based startup Reservoir announced earlier this year that it had raised $8 million in seed funding, enabling it to expand beyond its 100 local installations to as many as 1,000 by the end of 2027. It is one of many startups offering innovative heat pump technology. Reservoir claims to have built an ultra-efficient water heater that can predict hot water demand, store energy, and detect plumbing leaks. The water heater is programmed to spend the first month in a home collecting information about water use patterns to train a model, which then allows it to run at the most efficient and cost-effective times, cutting costs without limiting the supply.

Reservoir has also fitted its water heater with an ultrasonic flow sensor to help detect plumbing leaks. Its higher-end models include additional features, such as a recirculation valve to deliver instant hot water and a mixing valve that can prevent pipes from freezing in cold weather. Everything can be managed easily through a mobile application.

In the United Kingdom, heat pumps have surprised many users by offering them a much-needed reprieve from the seemingly endless summer heatwaves. Only about 3 per cent to 5 per cent of U.K. homes have air conditioning, but uptake is rising rapidly as temperatures above 30°C are becoming increasingly common in the summer months. However, people who have already switched to heat pumps for heating purposes are now seeing their potential for cooling during hotter periods. 

The U.K. government’s boiler upgrade scheme offers grants of $10,100 to help homeowners in England and Wales with the installation cost of an air-to-water or ground-source heat pump (a heat pump that extracts heat from the ground through buried pipes). Households that are not connected to the gas grid qualify for an additional $2,000 in support. 

Heat pumps are growing in popularity in various parts of the world as an alternative to gas-powered heating. They can also be used for cooling, making them increasingly popular in countries with lower air-conditioning uptake, where temperatures are rising. Greater innovation and lower prices could make heat pumps much more popular in the coming decades.

By Felicity Bradstock for Oilprice.com

The Race to Solve Nuclear Energy’s Biggest Problem

By Felicity Bradstock - Sep 12, 2026

• Nuclear expansion is increasing pressure on governments to establish permanent disposal facilities for spent fuel.
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• Canada is advancing a deep geological repository near Ignace, Ontario, using copper-coated containers, bentonite clay, and hundreds of metres of rock.
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• The United States still lacks an operating permanent repository and is exploring new nuclear-waste arrangements beyond the stalled Yucca Mountain project.

Nuclear power is growing in popularity once again as governments worldwide look to diversify their energy mix and reduce reliance on fossil fuels. Several countries are now looking to develop or expand their nuclear energy capacity over the coming decades. However, one challenge remains – nuclear waste. Disposing of waste materials from nuclear energy operations remains a complex task with no perfect solution.

As countries worldwide have grown their nuclear power capacity, many governments are still struggling to decide on the best solution for disposing of nuclear waste. There are three types of nuclear waste: low-, intermediate-, and high-level radioactive waste. Most of the waste produced by nuclear plants consists of lightly contaminated items, such as tools and work clothing, with radioactivity levels of around 1 per cent. High-level waste consists of spent fuel, which accounts for around 3 per cent of the total volume of waste from nuclear energy production, yet contains 95 per cent of the radioactivity.

Nuclear facility operators are responsible for the safe disposal of any radioactive waste they produce. Nuclear power plants generate relatively little waste compared to many other energy sources; however, it is some of the most difficult to manage. Nuclear fuel is very energy-dense, meaning little is required to generate large quantities of electricity and just 5 grammes of high-level waste is produced to provide for an individual’s annual energy needs. A conventional 1 GW nuclear plant, which can supply over one million people with electricity, produces around three cubic meters of vitrified high-level waste per year.

In Oakville, Canada, the Nuclear Waste Management Organisation (NWMO) has developed a test site for nuclear waste storage. The site is situated in a warehouse, where a driverless forklift stacks 8,000 kg of bentonite clay blocks into a narrow rock tunnel, and another autonomous machine fills the gaps around the blocks with crumbled clay. Each one encases a copper-coated steel container created to hold spent nuclear fuel. These blocks are then sealed behind additional clay and concrete in tunnels deep underground, so that the radioactive material can slowly decay over thousands of years with no risk to the public.

The metal fuel containers are designed to withstand the pressure of being buried beneath a 3-kilometre-thick glacier, should the next ice age arrive before the radiation has fully decayed. They have also been successfully tested for resistance to crushing under an extremely strong force, equivalent to being over 6 km underwater. The NWMO team aims to build the final site 1,600 km northwest of the test facility, in the town of Ignace. It will be buried at a depth of around 750 metres in the hard rock of the Canadian Shield. Once complete, around 2040, it is expected to be capable of storing nearly 6 million bundles of spent fuel produced by Canada’s four nuclear power plants over their operational lives.

Similar sites are also being developed in other countries, such as Finland, Sweden, and Japan. Scientists have overcome several technical challenges associated with developing deep geological repositories over the years, making them a viable site for nuclear waste storage. However, securing political and public support for these facilities remains a challenge due to fears of contamination.

The United States government began exploring potential deep geological repository sites in the 1980s but has now fallen behind other countries in development due to widespread local opposition. The government chose Yucca Mountain in northern Nevada as the location for the development of its first geological repository, becoming the first in the world to submit a licence application for such a site. 

There are several concerns about developing a facility at this location, including the nearby volcano, which geologists still consider active. The proposed location is in an active earthquake zone and lies above the water table, posing a risk of radioactive particles, known as radionuclides, being released into the environment. However, the biggest challenge has been political opposition. When Nevada Senator Harry Reid became the U.S. Senate’s majority leader in 2007, he put the project on permanent hold.

In the age of the nuclear renaissance in the United States, the lack of progress in Nevada has led the Department of Energy (DoE) to return to the drawing board. The DoE selected sites in Utah, Idaho, Louisiana, Oklahoma, and Tennessee as possible locations, but Yucca Mountain remains the only legal option for permanent storage at present. The Trump administration would need to pass legislation to remove Yucca Mountain from its designation as a federal site to develop a repository elsewhere. Meanwhile, the U.S. has built up around 95,000 metric tonnes of nuclear waste over the years, which needs to be suitably managed. 

Several deep geological repositories are expected to commence operations in various countries over the coming decades. Meanwhile, scientists are continuing to explore alternative waste management solutions. However, as multiple governments are now exploring the potential to develop their nuclear power capacity, they must also address the waste problem and construct safe disposal facilities alongside new nuclear power projects.

By Felicity Bradstock for Oilprice.com

Stolen Electricity is Powering Illegal Crypto Farms Across the Globe

By Haley Zaremba - Sep 12, 2026

• Mexican authorities busted a 300-computer crypto mining farm in Puebla siphoning power from a federal hydroelectric dam, part of a nationwide crackdown that logged $817 million in electricity theft losses in just seven months.
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• Malaysian police have uncovered 14,000 illegal Bitcoin mining sites since 2020, with miners stealing an estimated $1.1 billion worth of electricity from state utility Tenaga Nasional.
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• From Cambodia to Kyrgyzstan, authorities are finding illegal crypto mining increasingly tangled up with money laundering, forced labor and organized crime networks.
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Electricity theft is a global problem, and it’s getting more dire all the time. While the problem is most common in developing countries, where grid infrastructure is limited and utilities and state authorities have lower oversight capacities, developed countries are not immune either. This theft can occur in many forms and at many scales, from individuals tapping into power lines to power their individual residences to large-scale and sophisticated theft schemes to power entire cryptocurrency mining farms.

Just this week, Mexican authorities busted a clandestine operation in rural Puebla, where 300 computers were using stolen electricity to mine cryptocurrency around the clock. The operation was siphoning electricity from a federal hydroelectric complex, and could be connected to a larger money laundering operation.

“This activity consumes a great deal of energy and generates a lot of noise, which is why operators seek out isolated and very remote locations. That is what alerted us,” Francisco Sánchez, head of Puebla’s Public Security Secretariat, recently told reporters. “We had been tracking reports that this activity was taking place in that part of the state, particularly because of its proximity to the [Nuevo Necaxa] dam. There was a very large power connection.”

Police authorities say that this operation is just one of many similar illegal ventures in Puebla and other neighboring states in central Mexico. Mexico’s Federal Electricity Commission (CFE) is spearheading a nationwide crackdown on electricity theft, which has become an increasingly grave issue. Based on the most recent available data, from January and July 2024, 6,346 GWh of losses were reported due to electricity theft, meter tampering and illegal connections. This amounts to a loss of approximately 13.8 billion pesos (about $817 million). It’s safe to assume that the numbers for 2025 and 2026 are considerably higher.

Mexico is not alone in this fight. Electricity theft to power cryptocurrency mining operations occurs globally, in rich countries like England as well as developing nations. But the problem seems to be particularly acute in Southeast Asia. Malaysian authorities, for example, have initiated their own crackdown on illegal Bitcoin mining operations, which stole approximately $1.1 billion worth of electricity from state-owned energy company Tenaga Nasional from 2020 to 2025. Over that time period, the Malaysian police force recorded a stunning 14,000 illicit Bitcoin mining sites across the country. And the problem is not limited to financial fallout – it also poses a critical threat to Malaysia’s energy security.

“The risk of allowing such activities to happen is no longer about stealing,” Akmal Nasrullah Mohd Nasir, the deputy minister of energy transition and water transformation, was quoted by Bloomberg late last year. “You can actually even break our facilities. It becomes a challenge to our system.”

Moreover, global authorities are reporting that cryptocurrency mining schemes are increasingly interlaced with organized crime. “Cryptocurrency mining is not inherently criminal, but authorities are increasingly finding links between illegal crypto mining, online gambling, money laundering, and Southeast Asia's industrial-scale cyber scam networks,” DW reported last month. In Cambodia, crypto has been linked with forced labor operations, while in Kyrgyzstan (sometimes known as Cryptostan for the number of mines exploiting the nation’s subsidized energy rates) police report that “virtual assets are being folded into the country’s criminal infrastructure like cyber fraud, embezzlement, money laundering, [and] the concealment and movement of illicit funds.” Meanwhile, in Mexico, it is speculated that Bitcoin might be at the bottom of a multiple homicide of a rock star and his entire family.

For every operation that is discovered and shut down there are many more that continue to fly under the radar, especially in poor countries that are the least equipped to detect theft – and that can afford it the least.

By Haley Zaremba for Oilprice.com

White House Weighs Defense Production Act as U.S. Refineries Maxed Out

SOCIALISM BY ANY OTHER NAME

By Julianne Geiger - Sep 11, 2026

The White House is considering using the Defense Production Act to add U.S. refining capacity, with American refineries already running at 98% capacity and diesel prices above $6 per gallon for the first time.

The proposal was discussed during President Donald Trump’s recent meeting with nearly a dozen U.S. refiners, according to Reuters. No decision has been made, and discussions are expected to continue.

Refining executives told administration officials that federal money would produce more barrels faster if it were used to expand existing plants or improve refinery efficiency. Building an entirely new refinery would cost billions and take years.

The Defense Production Act gives the president authority to provide financial assistance and direct industrial resources toward materials and capacity considered necessary for national defense.

Trump laid the groundwork in April, when he issued a presidential determination declaring domestic petroleum production, refining and logistics capacity essential to national defense. The order authorized purchases, purchase commitments and financial instruments under Section 303 of the DPA to increase that capacity.

U.S. refiners have little spare room today. Refinery utilization reached 98% in late August after spending three consecutive months above 95%, the longest such stretch since 2000.

That output has become increasingly valuable as refinery capacity disappears elsewhere. Phillips 66 estimated last month that roughly 7 million bpd of refining capacity was offline in Asia and the Middle East, with another 1.4 million bpd unavailable in Russia.

U.S. diesel inventories are now 13% below their five-year average. Diesel prices crossed $6 per gallon this week as disruptions in the Middle East and Russia squeezed global fuel supplies.

One possible test is already taking shape in Texas. America First Refining plans a 168,000-bpd refinery at the Port of Brownsville, announced in March as the first new U.S. refinery in nearly 50 years. Reuters said it remains unclear whether the project could receive DPA funding.

By Julianne Geiger for Oilprice.com

 

Oil Industry Braces for Years-Long Iran War

By Irina Slav - Sep 12, 2026

• Oil industry executives are preparing for a prolonged U.S.-Iran war, with little expectation of a quick political settlement and oil prices likely staying higher for longer.
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• Physical oil markets are even tighter than $100+ Brent suggests, as tanker rates, insurance costs and premiums for alternative crude supplies soar.
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• The fuel crunch is becoming particularly severe, with refiners running hard but insufficient global capacity to replace lost Middle Eastern and Russian supplies.

Oil producers, traders, and refiners are bracing for a prolonged war between the United States and Iran in the Persian Gulf with little to no hope of a quick resolution. By extension, they are also preparing for higher prices for longer, a theme present at this year’s edition of the Asia Pacific Petroleum Conference.

Reuters’ Clyde Russell reported this week that the mood at APPEC was not particularly cheerful as hostilities in the Middle East escalate once again, suggesting achieving peace would be quite a challenge. The Reuters columnist called it “a war of egos”, in which neither the U.S. president nor Iran’s leadership would accept anything less than an ostensible victory.

However, Russell also reported that the Asian oil industry wants Trump to leave the Persian Gulf and let the local countries deal with “the mess” that the U.S. and Israeli strikes on Iran left. Clearly, this is the most unlikely scenario of all possible scenarios, so drillers, traders, and refiners in Asia and beyond are preparing for a long disruption in oil flows out of the Middle East—and waiting for the U.S. midterm elections.

“We need a political settlement, but that will take ‌regime change in Washington or Tehran,” one APPEC delegate told Reuters’ Russell, adding that it was more likely for regime change to take place in the United States than in Iran, which appears to be a widely shared view among the event’s delegates. However, it would be difficult to argue that a Democrat win at the November midterms would translate into any form of regime change. This, in turn, means the war will likely extend into next year and possibly last until Trump’s term in office ends.

The implications of such a scenario are rather unpleasant, economically speaking. Brent is back above $100 per barrel, and this is just the futures price, not the price for physical deliveries. Those often cost a lot more, Russell and other commentators have repeatedly pointed out. Bloomberg just this week reported that Russia’s ESPO blend has surged to a premium of some $20 per barrel to Brent crude as Chinese independent refiners run out of alternative options, with the U.S. naval blockade on Iranian ports and the grab for Venezuelan crude cutting off two main supply channels.

Traders appear to have started paying more attention to physical prices than the futures market chart, Russell also noted in his report. This is a positive development because the fixation on futures prices missed a lot of what was happening in the physical market, which was mostly higher prices due to surging insurance and freight rates.

Tanker rates this month hit an all-time high as escalating risks to shipping in and out of the Middle East prompt traders and tanker operators to undertake inefficient and more expensive trade routes. The much longer workarounds are tying tankers and supertankers for longer with the shippers, tightening the market of available vessels so much that rates are skyrocketing to all-time highs. The benchmark daily rate for a very large crude carrier to ship oil from the Middle East to China has hit a record high of almost $800,000, per data compiled by Bloomberg.

Reuters’ Russell, meanwhile, reports that the freight rate for a tanker from the Persian Gulf to North Asia has surged to $30 per barrel of crude, up from $6 per barrel before the war. Insurance rates are also soaring, currently running at $2.50 per barrel, up from $0.05 per barrel. This means Persian Gulf producers need to offer discounts in order to move their oil—risking a missile strike in the process, no less—and these discounts have become the new focus of attention for traders. The other focus is the premium that blends sold outside the Gulf command, with Russia’s ESPO a case in point.

What is a difficult situation in crude oil is a lot more difficult in fuels. The fuel crunch is getting increasingly severe, and a prolonged war for the Strait of Hormuz will make matters quite a lot worse, as stated by industry executives at APPEC earlier this week. “We're still not running enough refining capacity to prevent those draws, and we keep eating into the surplus that exists around the world,” Vitol’s Russell Hardy said at the industry conference.

Refineries have been running at higher than normal rates to make up for lost production from the Middle East and Russia, but this has not been enough because, as noted by Vitol’s chief executive, there is not enough capacity to make up for all the production lost.

When the U.S. and Israel launched those first strikes on Iran, the general mood was that the war won’t last more than a week—perhaps a month. Then the timeline got moving, as it became clear that it was not going to be as easy to subdue Iran as expected, and as Iran shocked everyone by finally following through on its threat to close the Strait of Hormuz. Peace is not an immediate option, it seems. Brent and WTI are both over $100 per barrel. And there is no end-of-the-week Truth Social post by President Trump about the resumption of negotiations. This is, to put it mildly, not a good sign.

By Irina Slav for Oilprice.com

 

Coal demand to rise 1.2% as Hormuz closure drives gas prices: IEA

Marina Meireles | September 10, 2026 | 

Stock image: by Parilov.

Global coal demand is expected to rise 1.2% in 2026 amid conflicts in the Middle East and disruptions at the Strait of Hormuz, bringing global consumption to 8.94 billion tonnes, a new update by the International Energy Agency (IEA) shows.  

The fresh estimate reverses the IEA’s previous forecast for a slight year-over-year decline. The agency attributed the revision to higher gas prices, shifting weather patterns and increased coal-fired generation in countries with spare capacity.  

The disruption has particularly affected liquefied natural gas (LNG), an important competing fuel for power generation. Although coal shipments do not pass through Hormuz, restrictions on LNG flows through the waterway have tightened gas supplies and raised prices, improving coal’s competitiveness. 

The shift underscores coal’s continuing role as a fallback fuel when other energy supplies are disrupted, the IEA said. 

Hormuz disruptions 

Coal demand has risen in Europe, Japan, South Korea, China and other countries that have gas-fired power fleets and spare coal capacity. 

Weather is adding another source of demand. The IEA expects an unusually strong El Niño pattern this year to increase cooling requirements while reducing hydropower generation, putting further pressure on electricity systems. 

The outlook now depends heavily on how long disruption in the Middle East lasts. 

If tensions ease and LNG shipments resume, allowing gas prices to decline, global coal demand is expected to fall by 0.4% in 2027, to 8.91 Bt, according to the agency. Prolonged disruption could instead push coal use higher. 

Source: International Energy Agency.

IEA forecast 

Regional trends remain mixed. The agency forecasts coal demand will increase 1% in China, 4.2% in India and 6% in South Korea this year 

In Japan and the US the opposite is expected, with coal demand declining by 1% and 7% respectively. 

Source: International Energy Agency.

Coal production is expected to decline this year even as consumption rises, tightening the market and supporting prices. 

China’s output is forecast to fall following safety inspections after a major mine accident earlier this year. Global production of coal is expected to remain above 9Bt for a third consecutive year, with an expectation for output to rise slightly in 2027 after a dip in 2026 amid abundant inventories.  

Thermal coal prices rose in the first half of the year, at times reaching $150 a tonne. The IEA expects the Middle East crisis to boost global coal trade and help stabilize the market, tying its outlook increasingly to geopolitical developments far from major producing regions. 

(With files from Reuters)