The International Energy Agency (IEA) revealed that electricity consumption in the Middle East and North Africa (MENA) region has tripled since 2000, making it one of the fastest-growing regions in global energy demand. The agency explained that this accelerated growth was driven by rising populations and higher income levels, with air conditioning accounting for nearly half of peak demand.

The agency expects the region to see an additional 50% increase in electricity demand by 2035, based on current policies, supported by urban expansion, industrial growth, and rapid population increases.

Despite the dominance of oil and gas in the region’s energy mix, accounting for more than 90% of total generation, the coming stage will witness a major transformation. Oil’s contribution to electricity generation is expected to decline to just 5% by 2035, down from 20% currently, while natural gas, renewable energy, and nuclear will lead the next phase of growth. The agency estimates that solar capacity will expand tenfold to reach 200 gigawatts by 2035, with the share of renewable energy rising to 25% of the mix compared to 6% currently, while nuclear energy will record significant growth in the UAE, Egypt, and Iran.

Fatih Birol, Executive Director of the IEA, said: “Electricity demand is rising rapidly in the Middle East and North Africa, driven by growing needs for cooling and water desalination in a region suffering from heat and water scarcity, in parallel with population and economic growth. Since the start of the century, the region has recorded the third-largest global growth in electricity consumption after China and India. To meet this demand, generation capacity is set to expand by more than 300 gigawatts over the next decade, equivalent to three times Saudi Arabia’s current capacity.”

Natural gas is expected to account for half of the region’s energy mix by 2035, amid major investments from national oil companies such as Saudi Aramco, ADNOC, and QatarEnergy, which are channeling billions of dollars to expand their share in the liquefied natural gas (LNG) market.

Gulf producers aim to double their LNG capacity over the next decade, with gas serving as a transitional fuel and a bridge toward clean energy sources, as well as a means of maximizing returns and diversifying revenues away from crude oil.

Okan Kose, Managing Director at Accenture, told Bloomberg: “LNG still appears to be the best bet among all hydrocarbon commodities, as investments and trade in it deliver profit margins that are nearly unprecedented compared with any other commodity.”

But the agency warned that some countries in the region will be unable to meet growing demand. Countries such as Iraq, Syria, Yemen, Lebanon, and Sudan have faced repeated electricity crises. Iraq, despite its oil wealth, still suffers from chronic outages that cost it around $100 billion between 2014 and 2020.

Lebanon, meanwhile, has relied for years on polluting private generators and illicit fuel trade to cover shortages. In Syria, generation capacity has fallen to less than 40% of pre-war levels. In Libya, production capacity has dropped by half due to civil conflict.

Nevertheless, the region holds enormous opportunities thanks to abundant renewable resources. For example, on July 15, 2024, Yemen inaugurated the Aden solar power plant with a capacity of 120 megawatts, funded by the UAE.

The plant supplies electricity to between 150,000 and 170,000 homes, reducing reliance on fossil fuels. Solar currently represents around 10.4% of Yemen’s total electricity, and this share is expected to double by 2026 with the launch of the project’s second phase.

Bitcoin climbed on Thursday to its highest level in more than two months, coinciding with the official start of the US government shutdown.

The world’s largest cryptocurrency by market capitalization rose about 3.5% in the past 24 hours, briefly touching $119,455 (£88,516) before easing back to trade near $118,500. This marks Bitcoin’s strongest level since mid-August.

Other major cryptocurrencies also posted gains over the past day: Ethereum rose 5.5%, XRP gained 4%, and Solana advanced 6%.

The global cryptocurrency market cap reached $4.17 trillion today, up 4% within 24 hours. Bitcoin’s market dominance currently stands at 56.7%, while Ethereum holds 12.7%, underscoring Bitcoin’s continued position as the strongest asset in investor demand.

Government Shutdown and Its Market Impact

This surge coincided with the US government’s failure to reach a funding agreement, forcing federal agencies to close and resulting in temporary furloughs for around 750,000 workers at an estimated daily cost of $400 million.

The shutdown also delays the release of key economic data, including the highly anticipated nonfarm payrolls report due Friday, potentially altering monetary policy signals and shifting risk sentiment in markets.

Timothy Messer, head of research at BRN, said: “The US shutdown adds a new variable by removing key economic data and amplifying uncertainty. Options markets already reflect this fragility, as traders hedge against downside risks. At the same time, Bitcoin options remain relatively cheap compared with realized volatility.”

In other words, investors are paying for downside protection, but the cost of this insurance remains low relative to Bitcoin’s volatility, signaling a market in wait-and-see mode that leaves room for traders to speculate on big moves at low cost.

Gold and Cryptocurrencies in the Spotlight

Gold has also been a key beneficiary of mounting financial and political pressures in the US, ending September with a 12% monthly gain — its strongest advance since 2011. This reflects a broader investor shift toward tangible assets, as Fed officials continue to warn about inflation remaining “too high.”

New York Fed President John Williams reiterated that interest rate cuts remain conditional on incoming economic data, which may now face delays due to the shutdown.

Meanwhile, the cryptocurrency market sits between supportive inflows and cautious derivatives positioning. ETFs have provided momentum, with spot Bitcoin ETFs recording net inflows of $676 million on Wednesday, marking a third straight day of gains. Spot Ethereum ETFs also logged $80.79 million in inflows over the same period.

Is the Shutdown’s Impact Overstated?

Some analysts argue the shutdown’s market impact may be overstated. QCP Capital noted: “From a fiscal policy perspective, the US government shutdown should be a marginal market event, aside from delayed data and media noise. Essential services remain in place, wage compensation cushions income effects, and previous episodes did not derail risk assets. During the 35-day 2018–2019 shutdown, the S&P 500 rose about 10%. Given Bitcoin’s high correlation with equities, we view any pullbacks linked to the shutdown as buying opportunities, rather than chasing rallies.”

October: Historically a Strong Month for Bitcoin

Historically, October has been one of Bitcoin’s strongest months. Over the past 12 years, Bitcoin has posted gains in 10 Octobers, ranging from +10% to +40%. Seasonal patterns also tend to support Q4 overall, with Bitcoin rising in four of the last five fourth quarters.

CryptoQuant analyst Alex Adler Jr. noted that the current market setup shows Bitcoin in a “balance with upside potential” toward $130,000:

“The upper bound of this range is currently around $130,000, an area where short-term holders often take profits.”

With Bitcoin already pushing toward its two-month highs, seasonal historical factors and technical positioning suggest that the bullish momentum could continue through year-end.

Oil prices fell on Thursday, extending their losing streak to a fourth consecutive session amid concerns over oversupply in the market.

Brent crude futures for December delivery dropped by 52 cents, or 0.8%, to $64.83 a barrel by 09:53 GMT, marking their lowest level since June. US West Texas Intermediate (WTI) crude also declined by 52 cents, or 0.8%, to $61.26 a barrel. Both benchmarks had fallen about 1% earlier in the volatile session.

On Monday, Brent and WTI closed down more than 3% in their biggest daily loss since August 1, before extending declines on Tuesday with an additional 1.5% drop each.

Hiroyuki Kikukawa, chief investment strategist at Nissan Securities Investment, said the US government shutdown has added uncertainty to the global economic outlook, while expectations of higher OPEC+ output are weighing on sentiment.

According to three sources familiar with the talks, the OPEC+ alliance of oil-producing nations may agree in November to raise output by as much as 500,000 barrels per day — triple the scheduled increase for October — as Saudi Arabia seeks to reclaim market share.

Meanwhile, Jorge Montepeque, executive director at Onyx Capital Group, noted that some banks such as Macquarie have issued forecasts of a looming “supply glut” in the oil market, which has further pressured investor sentiment.

Western pressure on Russia and escalating support for Ukraine

Finance ministers from the Group of Seven said on Wednesday they would take steps to increase pressure on Russia by targeting entities that continue to buy Russian oil or facilitate sanction evasion.

In the same context, two US officials confirmed to Reuters that Washington will provide Ukraine with intelligence enabling long-range missile strikes against Russian energy infrastructure, corroborating a report by the Wall Street Journal.

The report added that this step will make it easier for Ukraine to target refineries, pipelines, and other facilities to deprive the Kremlin of oil revenues.

Giovanni Staunovo, commodities analyst at UBS, said: “There is renewed concern in the market about potential disruption to Russian oil supplies, but as long as no actual disruption occurs, the impact on prices will remain limited.”

Chinese demand and rising US inventories

Traders noted that demand from China, the world’s largest crude importer, for storage has helped support oil prices and limited losses.

The US Energy Information Administration said on Wednesday that US crude, gasoline, and distillate inventories rose last week as refinery activity and demand weakened.

Crude stocks rose by 1.8 million barrels to 416.5 million in the week ending September 26, compared with expectations for a 1 million barrel increase in a Reuters poll.

The US dollar fell against most major currencies yesterday and continued its weakness today. Despite attempting to recover some of its losses following the US Supreme Court’s decision to review in January a case concerning Federal Reserve Board member Lisa Cook — allowing her to remain in her position temporarily — the greenback extended its losing streak for a fourth consecutive session.

With the US government entering shutdown yesterday, and the Supreme Court delaying its ruling on Cook’s case, concerns over Fed independence may temporarily take a back seat.

Analysts note that the bigger worry for investors may be the lack of economic data due to the shutdown, which makes it harder to form a clear assessment of US economic prospects and the Fed’s policy trajectory. However, market movements remain far from panic.

Disappointing ADP Report Draws Attention

The main driver behind the dollar’s weakness was not necessarily the government shutdown, but rather the suspension of Friday’s official jobs report, which shifted traders’ focus more heavily to the ADP survey for a snapshot of September’s labor market performance.

The report showed that the private sector lost 32,000 jobs instead of an expected gain of around 52,000, heightening concerns about a deeper slowdown in the labor market.

Although the ISM manufacturing PMI came in better than expected, the employment sub-index remained in contraction territory, while input prices slowed, providing further reasons for dollar traders to maintain short positions.

Impact on Fed Expectations

Market expectations for Federal Reserve policy were also affected. A 25-basis-point rate cut in October is now fully priced in, while another cut in December is seen as almost certain.

As for 2026, where expectations had previously pointed to two more quarter-point reductions, markets are now pricing in close to 70 basis points of additional cuts.