China ordered miners in Inner Mongolia to increase coal output. Oil prices rose on Friday as a record rise in the cost of gas rekindled demand for the most polluting fossil fuels to keep factories operating and households heated.
The recovery in economic activity caused by coronavirus has revealed frighteningly low natural gas supplies. It left traders, industry executives, and governments scurrying as the northern hemisphere entered winter. The worldwide energy crisis has resulted in gasoline shortages. Blackouts in certain countries have underscored the challenge of reducing the global economy’s reliance on fossil fuels.
In China, coal production has been reduced to meet climate targets. However, officials have suddenly ordered more than 70 coal mines in Inner Mongolia to increase output by roughly 100 million tonnes, or 10. According to statistics, India, the world’s second-largest coal consumer after China, is also experiencing power outages due to a scarcity of coal, with more than half of its coal-fired power plants running on less than three days’ worth of fuel from the federal grid operator.
Oil prices increased on Friday. This put them on course for gains of about 5% this week as businesses move to alternative fuels. In light of the gravity of the situation, the US has not ruled out using its strategic petroleum reserves. Generally, it reserves it solely in significant supply disruptions such as hurricanes.
Global gasoline shortages are a further setback for a world economy that is still struggling to recover from the coronavirus pandemic. They portend an expensive winter for consumers.
On Friday, two industry sources reported that Bangladesh purchased two cargoes of liquefied natural gas (LNG) for delivery in October at record prices, as low stockpiles in Europe increase rivalry with Asia for supplies ahead of winter.
Furthermore, soaring energy prices escalate tensions in Europe over the green transition. European Union member countries are divided on climate change measures. Wealthier countries want to keep the pressure on to phase out fossil fuels. However, poorer countries are concerned about the cost to the consumer.