How the Iran war aftershocks are hitting oil, coal, climate

With the Iran war now over 100 days old, here's the latest rolling snapshot of how it's driving changes in energy markets.

The big picture: Global oil use is going down (in the short term), UN climate officials are using the crisis to push for clean energy, and coal is getting more use in the Asia-Pacific region.

🛢️ Oil: The Department of Energy's data arm now sees global oil use dropping this year by 1.1 million barrels per day (bpd) before bouncing back next year.

• The big picture: "High fuel prices, reduced fuel availability, and government initiatives have lowered oil demand," the Energy Information Administration said in its latest outlook Tuesday.
• The intrigue: The agency again boosted its estimate of U.S. production growth, signaling a real — but not huge — response to higher prices.
• What's next: It now sees a rise from 13.7 million bpd this year to almost 14.2 million bpd next year, compared to a pre-war estimate of a 2027 decline to 13.3 million.

🌏 Global warming: Officials at midyear UN climate talks in Bonn, Germany, this week are pointing to the crisis to justify more aggressive steps.

• Driving the news: The Turkish hosts of the big annual UN summit in November (COP31) on Tuesday unveiled initiatives including a target of electricity meeting 35% of total global energy demand by 2035.
• Friction point: Simon Stiell, the top UN climate official, said in a statement that the "current fossil fuel cost crisis" is "painfully" making the case for these kinds of efforts.

🏭 Coal: New analysis from the consultancy Rystad Energy shows a "significant near-term surge" in use of coal for power generation in the Asia-Pacific region.

• State of play: Disruptions in Qatar's liquefied natural gas sector and higher prices for the fuel are driving the increase in the most CO2-emitting fuel.
• Yes, but: While coal is getting a near-term boost, a number of analysts see the conflict also driving more movement toward renewables and storage in various regions.

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