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As the Northern Hemisphere winter quickly approaches, Asian thermal coal prices have climbed to two-year highs and could be on the cusp of a major breakout as utilities stockpile the dirty fuel amid disruptions to natural gas and crude product markets caused by the war in Ukraine and the Strait of Hormuz disruption.

Newcastle coal futures, an Asian benchmark, are up more than 40% on the year and could surge even higher if the $150-a-ton level is sustained.

Prices on Tuesday closed at their highest levels since August 2024.

The combination of Ukraine decimating Russian refineries with drone attacks and the Strait of Hormuz disruptions to energy flows has sparked a global refining crisis that has encouraged utilities to switch from higher-priced natural gas and heating oil to cheaper alternative fuels such as coal.

Morgan Stanley analysts led by Amy Gower wrote in a note last week that the global refining crisis has made "the long-term outlook for thermal coal demand more resilient." They raised their long-term outlook for Newcastle export prices by 4% to $125 a ton.

According to Bloomberg, China's coal output has fallen more than 3% in the first eight months of the year after a deadly mining accident earlier this year triggered safety inspections and prolonged shutdowns. 

Wood Mackenzie analyst Hangyu Li expects more Chinese mines to get the green light to restart, but any new production would come as a lag.

"We expect more mines to gradually win approval to restart after about four months of suspension, but a quick rebound on production in the near-term is unlikely," Li wrote in the note.

Possible relief from a harsh winter could come from above-normal temperatures forecast across Asia because of a record-breaking El Niño, which would ease heating demand. 

Authored by Alastair Crooke

As part of its “blockade-for-blockade,” “airport-for-airport” strategy, Ansarallah carried out a third attack on Riyadh International Airport on Saturday — 12 people (mostly civilians) were killed and more than 300 injured. This, in tandem with Iran’s escalating attacks on tankers, and expanding its maritime operations, immediately increases the pressures on President Trump to respond — at the precise moment when midterm elections loom.

As the military conflict between Yemen and Saudi Arabia continues, the latter has become increasingly dependent on attacks against Yemeni civilian targets — by Sept 2025, reports confirm that “nearly 15,000 civilians have been killed by direct military action, most of them in air strikes by the Saudi-led Coalition.” Yet the Yemeni armed resistance, taking its cue from Iran’s experience, sees that Saudi is infinitely more vulnerable via its energy infrastructure sitting out in the open.

If Yemen continues to strike at key Saudi economic and energy assets with precision, the consequences for Riyadh will multiply — the battlefield will increasingly become that of Saudi infrastructure destruction and pain for the West versus Yemeni civilian casualties.

This scenario could lead to major capital destruction, a sovereign debt crisis, and Riyadh forced to abandon yet more of its Vision 2030 projects on which MbS has staked the kingdom’s future.

Saudi Arabia continues to behave as though the old formulas of sectarianism, anti-Iran propaganda and an anti-Shia narrative can once again be used to maintain their pro-Western positioning. But those tired mantra have lost their effectiveness — even among large parts of the region’s Sunnis.

The situation today is fundamentally different. AnsarAllah does not represent the Twelver Shia framework that Saudi propaganda could easily portray as an “Iranian project.” AnsarAllah-governed Yemen has its own ideological framework, theological traditions, political history, and system of governance. Neither AnsarAllah nor the broader pro-Sana’a camp can simply be reduced to one sect or social class.

The AnsarAllah Yemeni landscape includes Hanafi Sunnis, Zaidis, Jaroodiya, Ismailis, and other Islamic schools, with even elements of Salafi groups existing within the broader Yemeni social structure.

In short, unless MbS capitulates to AnsarAllah demands — which it seems he is incapable of so doing — the consequences could develop into a devastating macro-economic cascade occurring within the key pivot situated at the center of the Gulf economic model; a cascade, furthermore, which, as its momentum grows, and foreign capital flees the kingdom, will bring a systemic collapse to the entire western colonial enterprise in the Gulf.

The more paradoxical element to this drama is that it is not from AnsarAllah’s attacks that MbS’ is most at risk — or from which his downfall might be precipitated. It will not come from the battlefield either. Regime change inside Saudi Arabia will come about as a result of his own hand — his compulsive quest to centralize control.

Even Edward Luttwak, known for his links to the western security state, observes that —

…the reason for [the impotence] of Saudi Arabia, in the face of the Houthi offensive, is that, for the Kingdom’s ruling family, the most deadly danger has long been a military coup d’état — such as the one which ended Iraq’s monarchy and killed every single member of its Husseini ruling family on 14 July 1958.

Against that danger, the successive heads of the Saudi ruling family have implemented the most effective remedy possible: divide and rule, not against foreign enemies, but within their own armed forces. For that reason, the different combat elements of the armed forces are geographically separated in the country’s vast territory, and commanded by different princes in charge of various parts of the ministry of defence, all of which are subordinate to the minister himself, Prince Khalid (a younger brother of Mohammed bin Salman).

MbS’ fear is that one F15 pilot, outside of the privileged Royal family Stipendiary circle, might choose to attack one of the Kingdom’s princely palaces (instead of striking at an AnsarAllah target) as a prelude to an all-out military revolt. This is no fanciful threat — an old “Saudi hand” recalled recently hearing one young Saudi officer threatening to do exactly that.

By cutting off traditional tribal patronage by which tribal leaders had expected to receive their share of the kingdom’s oil wealth; by seizing tribal lands earmarked for MbS “vanity projects”; and by actively working to reshape Saudi Arabia’s core legitimacy away from traditional tribal-religious alliances towards a nationalist, youth-driven identity centred around Vision 2030, MbS has cut away the political leverage that traditional tribal elders historically held within the Royal Court.

MBS has made many enemies through the transformation of the Kingdom not towards a nation-state, but rather toward being the property of a single family. He has concentrated immense political, economic, and security powers within his immediate branch of the family, acting as an absolute authority.

As one commentator writes —

For traditional tribal groups like the ‘Anizah, this means that policy decisions are made strictly from the top down, leaving little room for the traditional consensus-building or special autonomy that tribes historically enjoyed.

The erosion of the historic social contract has left a deep sense of economic anxiety and loss of prestige among traditional tribal structures — and among the Wahhabi religious establishment.

The result is that —

…a tribal realignment is under way. In the north and central areas, the Shammar and Anizzah desert tribes have reportedly sealed the borders to Jordan and Iraq. In the south, mountain tribes with historical kinship ties to AnsarAllah are more likely to ignore the border with Yemen than defend the crown.

And we’ll know, soon enough, whether there is any foundation to the [multiple] rumors that representatives of more than a dozen Saudi tribes have sat with IRGC representatives and floated a new political compact — a federal state with tribes receiving a share of oil and gas revenues.

It wouldn’t be surprising if there are not other tribes and clans throughout the Region (Syria, Iraq …) who have a similar smoldering resentment to that of the Saudi tribes, festering secretly away, and similarly derived from their own experience of top-down colonial exploitation.

Might the Saudi Kingdom experience a revolt against MbS? Such a possibility is not without precedent: When King Saud’s reckless governance threatened the monarchy’s survival in 1964, the family, senior princes, and the religious leadership stepped in to strip him of power and enforce his abdication.

In the event of the collapse of MbS-led al-Saud family rule, this would not only topple the Gulf colonial project, but would then initiate a scramble for a fundamental geopolitical re-alignment of the region.

The colonial “current shape” imposed upon West Asia for more than a century is at an inflection point. Everything is “up in the air.” How will President Trump react to AnsarAllah’s accelerated attacks on Saudi Arabia? Will he launch a wider war across the region by attacking Iran, Yemen or Iraq? Or will a major attack on north Yemen against Ansarallah, with Pakistani and Israeli participation, be authorised? Or might the Sistan-Baluchistan region of Iran erupt as a result of a Pakistani-CIA insertion of cross-border Balochi insurgents into Iran, potentially leading to Iranian exchanges of fire with Pakistan?

We don’t know. But it is widely understood that the region’s current shape was drawn up for other, earlier purposes — Bahrain was Persian for two centuries before 1783; Kuwait was a district of Basra until Britain drew a line of separation in 1899; the United Arab Emirates were Trucial Oman (coastal sheikhdoms under British protection, until December 1971). Qatar was a Bahraini suzerainty, then Ottoman, then British, before it became a state in 1971. Lebanon and Syria were carved out of the Ottoman ruin by France in 1920. Jordan was proclaimed a “state” by a British High Commissioner in 1921.

Luttwak forewarns that — “Ultimately… the [al-Saud] inheritors must learn to share Saudi Arabia’s vast flow of oil revenues with everybody else, or else risk losing more than just their wealth.”

Iran has just launched large-scale military exercises amid indications of a possible imminent Israeli-American escalation to come very soon.

Change seems inevitable.

Goldman energy analyst Nikhil Bhandari warned last month that a deepening refining crisis could prolong diesel and gasoline pain at the pump well into 2027. Now, the International Energy Agency is reinforcing that warning, cautioning that diesel supplies could remain tight into the second half of next year.

"The gasoil market balance will remain tight well into 2027 and is dependent on a recovery of product supply from the Middle East. Failing this, further demand reductions and the heavy economic costs these will entail may be needed to balance markets," the IEA wrote in its Oil Market Report for October.

The report continued, "Global gasoil markets tightened counter-seasonally in 3Q26, as prolonged disruptions to Middle Eastern and Russian exports forced stock draws. Combined with much heavier-than-normal inventory declines in 2Q26, this has deprived global gasoil markets of crucial stock cover ahead of the peak winter demand season."

In response, governments are slashing fuel taxes, subsidizing consumers, and draining strategic reserves as diesel prices hit records across the world. Those measures can cushion the immediate shock, but the IEA forecasts that "even with a rapid recovery expected in refinery throughputs into year-end, gasoil supply falls short of meeting demand in 4Q26, suggesting that the replenishment of lost inventories, outside of typical seasonal fluctuations, is unlikely before 2H27."

The combination of Ukraine decimating Russian refineries with drone attacks and ongoing Strait of Hormuz disruptions has pushed the world into a refining crisis. If these pressures continue, they could keep the market from balancing in the first half of next year, sending prices even higher, and unleash a more brutal period of demand destruction. That means businesses and consumers cutting fuel use because prices are too high, with consequences for transport, agriculture, and industrial activity. Higher fuel prices could also feed into inflation, push government bond yields higher, and weigh on global equity markets.

With US diesel prices at the pump topping $6.50 a gallon (data via AAA) last month, the industrial fuel squeeze pushed President Trump last week toward an unlikely source of relief: Russia.

In recent days, Trump said he struck a deal with Moscow to immediately supply 300,000 metric tons of diesel to the global market, seeking to ease shortages ahead of the US midterm elections.

The Trump administration also pushed the Group of Seven wealthy democracies to release 100 million barrels of oil and fuel products in the coming weeks to cap prices ahead of the Northern Hemisphere winter.

On Tuesday, Vice President JD Vance announced that the administration would use wartime authority to increase fuel production at a refinery in Texas: "I am pleased to announce that the Trump administration, working with the refinery at Delek, has used the Defense Production Act and we're going to expand the refinery right here in Tyler, Texas."

"We want millions of gallons of commercial-grade and military-spec fuel to come out of this refinery, in addition to what it's already producing," Vance told the crowd.

Circling back to Goldman analyst Bhandari's note on the diesel crisis, which could extend well into 2027, he gave clients three scenarios for where global product inventories could head next.

Read the report here. Also read: Goldman commodity experts Yulia Zhestkova Grigsby and Daan Struyven recently warned that the diesel crisis is setting up the next gasoline squeeze.

France's welfare-state promises are colliding with a bill that keeps getting bigger. Far-left radicals rioting, fiscal crisis, and political uncertainty are exposing the upper limits of a system built on handouts, heavy taxation, uncontrolled borrowing, and mass migration. 

For American voters heading into the midterms in the next several weeks, the warning from France is worth considering as far-left Democratic Socialist of America gains power within the Democratic Party: Promises of more and more and more government handouts come with consequences, just as France is finding out the hard way today. 

As President Emmanuel Macron ends his term in crisis, right-wing Marine Le Pen is positioning herself as the savior candidate as France's finances rapidly deteriorate.

Her shadow budget proposes shrinking the deficit to 3.7% of economic output next year, well below the government's 5% target, before bringing it to 2.2% by 2032. Savings would come largely from spending cuts, lower transfers to the EU and reduced migrant spending.

The proposals come as high uncertainty clouds the political landscape and deteriorating public finances drive up France's borrowing costs. Le Pen has warned that maintaining the current spending trajectory risks a default crisis.

it's been a while since we had a European sovereign debt crisis *FRANCE-GERMANY 10-YEAR YIELD SPREAD WIDENS 8BPS TO 135BPS France CDS widest in 13 years https://t.co/9opJUmD2uS

— zerohedge (@zerohedge) October 1, 2026

The size of the welfare state helps put things into proportion. Public spending has topped 57.3% of France's economic output in 2025, the second-highest share in the European Union. Public debt is projected to reach 120% of GDP in 2027, behind only Greece and Italy among EU members. 

Higher borrowing costs make funding the welfare increasingly impossible. Spending more on debt service leaves the government less flexibility to fund services, absorb economic shocks, or deliver the next round of handout promises as services continue to degrade. 

Related:

• France Is Imploding, Energy Is Surging... And Markets Aren't Panicking. Yet.

The choices of what the government has proposed become increasingly uncomfortable: higher taxes, spending cuts, or still more borrowing 

That is the backdrop to a warning described by French technology entrepreneur Brivael Le Pogam, co-founder of AI video startup Argil, aimed at Americans considering voting Democrat.

"I come from your future," he wrote on X.

In the warning letter to America, he said France already embraced many of the policies American progressives promote, only to discover that more and more government handouts don't translate into the socialist utopia politicians pitched; in fact, quite the opposite.  

"The promise was protection. The result is stagnation," Le Pogam wrote.

Le Pogam wrote: 

I'm French. I want to talk to Americans who are about to vote Democrat. Not to insult you. To warn you.

I come from your future.

In France we did everything your progressive politicians promise. Free healthcare, free college, generous welfare, strong unions, heavy regulation, high taxes on the rich, a state that takes care of everything. Public spending close to 57% of GDP, one of the highest on the planet. On paper, it's the dream.

Here's what it looks like from the inside. France hasn't passed a balanced budget since 1974. Our debt is above 3,300 billion euros. Interest on that debt is becoming one of the biggest items in the national budget. Our hospitals are collapsing despite record funding. Our schools rank lower every year. Young people with degrees can't afford an apartment in the city they were born in. Our best engineers leave for London, Zurich and San Francisco. And the rich you wanted to tax? They left too, and took the jobs with them.

The promise was protection. The result is stagnation.

The worst part is that nobody in France voted for decline. Every single step sounded generous, compassionate, reasonable. One more program. One more regulation. One more tax to fund it. Each step alone makes sense. Fifty years of them, and you wake up in a country that can no longer build a nuclear plant on time or keep its streets safe.

I love America because it's the one place on earth where people still believe they can build something from nothing. I came to Silicon Valley as a self-taught kid and it changed my life. That spirit is the most precious thing your country has.

Before you vote, ask yourself one question: is the program you're voting for making America more like America, or more like France?

Trust me. You don't want to be France.

I’m French. I want to talk to Americans who are about to vote Democrat. Not to insult you. To warn you. I come from your future. In France we did everything your progressive politicians promise. Free healthcare, free college, generous welfare, strong unions, heavy regulation, high taxes on the rich, a state that takes care of everything. Public spending close to 57% of GDP, one of the highest on the planet. On paper, it’s the dream. Here’s what it looks like from the inside. France hasn’t passed a balanced budget since 1974. Our debt is above 3,300 billion euros. Interest on that debt is becoming one of the biggest items in the national budget. Our hospitals are collapsing despite record funding. Our schools rank lower every year. Young people with degrees can’t afford an apartment in the city they were born in. Our best engineers leave for London, Zurich and San Francisco. And the rich you wanted to tax? They left too, and took the jobs with them. The promise was protection. The result is stagnation. The worst part is that nobody in France voted for decline. Every single step sounded generous, compassionate, reasonable. One more program. One more regulation. One more tax to fund it. Each step alone makes sense. Fifty years of them, and you wake up in a country that can no longer build a nuclear plant on time or keep its streets safe. I love America because it’s the one place on earth where people still believe they can build something from nothing. I came to Silicon Valley as a self-taught kid and it changed my life. That spirit is the most precious thing your country has. Before you vote, ask yourself one question: is the program you’re voting for making America more like America, or more like France? Trust me. You don’t want to be France.

— Brivael Le Pogam (@brivael) October 13, 2026

Le Pogam wrote in a second warning: 

My post about France went viral. Thousands of likes. Many Americans told me: "Democrats aren't socialists. America will never be France." I want to answer that seriously, step by step.

Start with a simple observation. Look at what has gotten cheaper in America over the last 25 years: TVs, phones, software, clothes, toys. Now look at what has exploded: college tuition, healthcare, childcare, housing.

What separates the two lists? The first lives in competitive markets. The second is exactly where government is most involved: subsidies, mandates, licensing, zoning, regulation.

College. Washington lends students almost unlimited money. Universities know the money will always come, so they raise tuition and hire more administrators. The student pays the bill for twenty years. More government money, higher prices.

Housing. Why can't a nurse buy a home in the city where she works? Not because of capitalism. Because of zoning laws, permits, environmental reviews, years of procedure to build a single building. The most expensive places to live in America are the places where it's hardest to build. When building is nearly illegal, prices explode.

Healthcare. The patient almost never sees the price. A third party pays, regulations limit who can compete, and costs climb year after year with no one able to say no.

So here is the trap. The problems you suffer from are not the failure of free markets. They are the places where the market has already been replaced by the state. And the solution you're being offered is more of the same.

That's the Trojan horse. It always works the same way. A real problem. A generous-sounding promise. A program that makes things worse. Then the failure of that program becomes the argument for the next one. People who lived under communism in Poland learned to recognize the lie and the mask the lie wears. The lie never presents itself as a lie. It presents itself as compassion.

In France we are at the end of that road. Debt we can never repay. Young people who can't afford a home. Our best people leaving. And every few years our cities burn. Nobody voted for this. They voted for one more generous promise, fifty years in a row.

If you're a Republican, share this with the Democrat in your life. Not to win an argument. To start a conversation.

If you're a Democrat, I'm not asking you to switch teams. I'm asking you to look at the pattern. Wherever the state took over, life became unaffordable. Don't fix the failures of government with more government.

Stay American. Ask for less state, not more.

My post about France went viral. Thousands of likes. Many Americans told me: "Democrats aren't socialists. America will never be France." I want to answer that seriously, step by step. Start with a simple observation. Look at what has gotten cheaper in America over the last 25 years: TVs, phones, software, clothes, toys. Now look at what has exploded: college tuition, healthcare, childcare, housing. What separates the two lists? The first lives in competitive markets. The second is exactly where government is most involved: subsidies, mandates, licensing, zoning, regulation. College. Washington lends students almost unlimited money. Universities know the money will always come, so they raise tuition and hire more administrators. The student pays the bill for twenty years. More government money, higher prices. Housing. Why can't a nurse buy a home in the city where she works? Not because of capitalism. Because of zoning laws, permits, environmental reviews, years of procedure to build a single building. The most expensive places to live in America are the places where it's hardest to build. When building is nearly illegal, prices explode. Healthcare. The patient almost never sees the price. A third party pays, regulations limit who can compete, and costs climb year after year with no one able to say no. So here is the trap. The problems you suffer from are not the failure of free markets. They are the places where the market has already been replaced by the state. And the solution you're being offered is more of the same. That's the Trojan horse. It always works the same way. A real problem. A generous-sounding promise. A program that makes things worse. Then the failure of that program becomes the argument for the next one. People who lived under communism in Poland learned to recognize the lie and the mask the lie wears. The lie never presents itself as a lie. It presents itself as compassion. In France we are at the end of that road. Debt we can never repay. Young people who can't afford a home. Our best people leaving. And every few years our cities burn. Nobody voted for this. They voted for one more generous promise, fifty years in a row. If you're a Republican, share this with the Democrat in your life. Not to win an argument. To start a conversation. If you're a Democrat, I'm not asking you to switch teams. I'm asking you to look at the pattern. Wherever the state took over, life became unaffordable. Don't fix the failures of government with more government. Stay American. Ask for less state, not more.

— Brivael Le Pogam (@brivael) October 13, 2026

The worst part is that no sound person voted for this Western decline. 

* * *

Update(1240ET): While dozens of ships have come under attack by Iran in the Hormuz Strait and nearby areas since the war began, resulting in damage and fires aboard vessels, it remains much more rare for a tanker to sink at a total loss.

However, the WSJ has confirmed Wednesday that two have completely sunk in the last 24 hours, the first of which we reported on below. Here are the further details via WSJ:

Two Emirati cargo ships have sunk in the past 24 hours after being struck in the Strait of Hormuz, an escalation with little precedent as Iran ramps up attacks to levels not seen since the war started.

The GFS Pride and the Cape Dao have both gone down, said Pakistan’s National Hydrographic Office, which monitors maritime activities in Middle Eastern waters. Maritime security companies confirmed the two losses Wednesday and said this was the first such incident in months.

The sinkings came as the U.S. military has been successfully shepherding more Gulf oil through the strait while bottling up Iranian oil exports with a naval blockade and sanctions.

One of the ships that sunk had been in distress and apparently abandoned since being first attacked on September 23, according to UN shipping agency data.

Despite many attacks, the WSJ notes that the last ship sinking in the waters occurred back in March. It details, "The vessel was hit by a projectile that sparked a fire in its engine room, forcing the crew to abandon the vessel. A tugboat sent to rescue the ship was also struck. Four seafarers died and three were severely injured, according to the International Maritime Organization."

On Wednesday Iranian state media has been widely circulating fresh footage of one of the sinkings:

???? Iranian media has released footage of what it says is a container ship sinking in the Strait of Hormuz, after hitting a mine. Read more: https://t.co/4LfekmsNG4 https://t.co/SRAiUVkpP7

— Roya News English (@RoyaNewsEnglish) October 14, 2026

*  *  *

Iran has quite obviously been surging its attacks on commercial shipping in the Strait of Hormuz in an attempt to wreak uncertainty and economic havoc for the Trump administration ahead of the November midterm elections, undermining a recent recovery in Persian Gulf oil shipments.

The attacks are now coming so frequently it is difficult to deep track. One source tallies of recent days, "Twelve vessels were attacked between October 5 and 11, including six on Sunday alone, and on Tuesday a tanker and a container ship were struck by unknown projectiles, according to UK Maritime Trade Operations (UKMTO), marking one of the most intense periods of attacks since the war began."

Other outlets also confirmed the single day record of six attacks this past Sunday. It some time for confirmation of all these vessels' status to emerge amid the fog of war in the contested strait.

The prominent and outspoken secretary of Iran’s supreme national security council, Mohsen Rezaei, has meanwhile affirmed that the IRGC was striking vessels nightly, and is likely to keep doing so.

"We target five or six of these every night," he told state TV. "Hormuz is under the control of the Islamic Republic."

While the US has been touting a successful naval escort mission to get unprecedented numbers (for wartime) of tankers through the strait, Rezaei described that the US is merely using small craft to smuggle Iranian oil on to larger tankers out at sea, and then doing ship-to-ship transfer.

Tehran has claimed further that American naval ships don't dare come close to Iran's shores, on fears of being hit.

On Wednesday, Iran's military has announced yet another attack, this time on a container ship. Al Jazeera reports of the notification:

Iran’s Islamic Revolutionary Guard Corps says that a container ship "carrying contraband" and attempting to pass through "an unauthorized and dangerous route" in the Strait of Hormuz exploded and caught fire after striking a naval mine.

Footage published by the IRGC shows a container ship it calls "illegal" sinking south of the Strait of Hormuz with 2,500 containers aboard. https://t.co/lCgeztmHSp

— Open Source Intel (@Osint613) October 14, 2026

Overall for the month of October we've seen at least 24 foreign vessels targeted and hit by Iranian forces. If this keeps up, oil prices are likely to be soaring by month's end.

"At least 18 ships were hit between Oct. 1 and Oct. 11, according to the UKMTO, with another six attacks recorded by other European security sources, the Financial Times reported," the NY Post comments.