Kuwait cracks down on cryptocurrency mining amid power crisis

Kuwait has launched a crackdown on cryptocurrency miners it accuses of being a "major" cause of a power crisis that has led to blackouts, as authorities seek to ease pressure on the grid before the start of a sweltering summer.
Authorities started a "wide-ranging" security operation last week, the interior ministry said in a statement, targeting homes used for cryptocurrency mining, an activity it said was illegal.
Crypto mining activities "constitute an unlawful exploitation of electrical power … and may cause outages affecting residential, commercial and service areas, posing a direct threat to public safety", the ministry said.
Kuwait has banned cryptocurrency trading but has no laws specifically addressing mining.
OPEC member Kuwait is grappling with a severe power crisis driven by population growth, urban expansion, rising temperatures and delayed maintenance at some plants.
Electricity in the country is extremely cheap and the government has urged residents not to waste it as the need to keep cool amid sweltering summer temperatures heaps pressure on a strained electrical grid.
Cryptocurrency mining, although a major cause of the power crisis, is not the only factor, a source at the electricity ministry told Reuters.
Mining for crypto uses vast amounts of computing power and has prompted authorities from Kosovo to Russia to curb its use to prevent electricity shortages. The miners tend to base themselves where power is cheap, and often in colder climes where it is easier to cool their servers.
Researchers at the University of Cambridge estimated that in 2022, Kuwait was responsible for just 0.05% of the world's bitcoin mining at the time.
While there is no good data on how much power crypto miners use in Kuwait, "it only takes a very small share of the total bitcoin mining network to have significant impact on the relatively small total electricity consumption of Kuwait," said Alex de Vries-Gao, founder of Digiconomist, a research project tracking crypto's energy use.
Kuwait's crackdown has targeted homes in Al-Wafrah, Kuwait's southernmost area, where the electricity ministry has previously said around 100 homes were used for mining, some of them consuming up to 20 times normal electricity levels. Energy consumption in Al-Wafrah fell by 55% following last week's operation, the electricity ministry said in a statement on Saturday.
"They saw government subsidies, saw the absence of oversight, and saw no laws in place, so they exploited the situation to their benefit," said Saud Al-Zaid, who formerly served as executive board member of the Communications and Information Technology Regulatory Authority in Kuwait.
Kuwait's central bank has warned against investing in crypto. The country's approach to the sector differs to that of some of its neighbours which have embraced the industry.
Dubai this week is playing host to a large crypto event, with Eric Trump, U.S. President Donald Trump's son, among those in attendance.
(Reporting by Ahmed Hagagy; Additional reporting by Elizabeth Howcroft; Writing by Yousef Saba; Editing by Tommy Reggiori Wilkes and Freya Whitworth)

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Gulf Today

4 hours ago

• Gulf Today

Afghanistan turns to Russia for some food supplies amid Iran-Israel war

Afghanistan is in discussions with Russia to import certain foodstuffs as the conflict between Israel and Iran, one of its largest trading partners, risked cutting off supplies, its agriculture minister told Reuters. As relations between Russia and the Taliban government have been improving, an Afghan delegation is visiting Russia's main economic conference in St. Petersburg this week, meeting Russian agriculture officials. "Afghanistan is definitely aiming for self-sufficiency in its agricultural products. However, we still rely on some food items that come from Iran, and if problems arise there, it will undoubtedly have its effects," Ataullah Omari said on the sidelines of the conference. Iran supplies Afghanistan with some dairy products, among other commodities, and there is widespread concern the week-old war between Israel and Iran could disrupt trade flows Russia - the world's largest wheat exporter - and Kazakhstan are the main suppliers of wheat and flour to Afghanistan. Russia is also supplying sugar and vegetable oil. Omari said that the country is now seeking wheat rather than flour from Russia. Afghanistan, the top buyer of Russian flour in 2024, increased its own wheat production by 10% last year to 4.83 million metric tons. The country's total wheat consumption is estimated at 6.8 million metric tons a year. "For the past four years, since the withdrawal of the Americans, we have been making efforts to provide our essential food supplies ourselves. The remaining amount, including flour and wheat, is supplied annually by Russia," Omari said. "We have requested that Russia send us wheat instead of flour. Additionally, the import of other products that come from Russia to our country annually is progressing well," he added. In April, Russia lifted its ban on the Taliban, which it had designated as a terrorist organisation for more than two decades, paving the way for Moscow to normalise ties with Afghanistan's leadership. Since 2022, Afghanistan has imported gas, oil, and wheat from Russia, marking the first major economic deal after the Taliban returned to power, facing international isolation following 20 years of war against US-led forces. Omari expressed concern about Afghan refugees living in Iran who could become victims of Israel's attacks. The UN Refugee Agency (UNHCR) estimates that nearly 4.5 million Afghan nationals reside in Iran. "Any kind of damage that occurs there is absolutely unsatisfactory for our nation and our people, especially for many of our refugees who live there and are our brothers," he said. Reuters

Arabian Post

15 hours ago

• Arabian Post

China's Iran Oil Bet Hits Strategic Snag

China is confronting significant disruption to its Iranian crude oil supply, risking both its energy security and geopolitical ambitions in the Middle East. With over 90 per cent of Iran's oil exports directed to China via Kpler, the contraction of that flow places Beijing's $400 billion 2021 cooperation deal in jeopardy. Major Chinese independent refiners, the so‑called 'teapots' in Shandong province, are enduring mounting losses as deepening discounts on Iranian oil clash with soaring global prices. Discounts have widened to between $3.30 and $3.50 a barrel against ICE Brent for July cargoes – up from approximately $2.50 in June – contributing to refinery utilisation dropping to around 51 per cent, down from 64 per cent a year ago. Despite Israel's airstrikes targeting Iranian energy infrastructure and concerns over potential U.S. sanctions, Iran has maintained its exports through a shadow tanker fleet and strategic logistics adjustments. Kpler reports that crude loadings have reached a five‑week high of about 2.2 million barrels per day, assisted by the use of a less exposed jetty on Kharg Island and pre‑positioning of floating stocks nearer to China – including approximately 8 million barrels stationed offshore China. ADVERTISEMENT In 2024, Iranian shipments to China peaked at 1.6 million barrels per day, but that volume had already declined to roughly 740,000 bpd by April 2025, as broader Middle East instability and tightening sanctions exerted pressure. Rival supplies from OPEC+ producers like Saudi Arabia and the UAE may partially compensate, yet analysts emphasise that prolonged disruption would still erode Beijing's strategic leverage and diplomatic role in the region. For China, this dependence on Iranian crude is part of a broader ambition to deepen its influence across the Middle East as a counterweight to the West. The initial rationale behind the 25‑year deal encompassed energy security, infrastructure projects, trade expansion, and regional diplomacy. But the conflict's escalation threatens those objectives, undermining China's established pipeline for cheap oil and complicating its efforts to mediate regional tensions. Economists note the urgency for Beijing to accelerate its shift toward renewable energy and domestic self-reliance. China had already reached a milestone with renewables comprising 56 per cent of its electricity capacity in 2024. The current moment has intensified calls to reduce external vulnerabilities and accelerate electrification. At present, the Chinese government has refrained from military engagement, calling for de-escalation and abstaining from direct intervention in support of Iran. Instead, it is pursuing regional diplomacy while guarding its considerable investments. A Chinese foreign ministry spokesperson emphasised the need to 'prevent the region from spiralling into greater turmoil', particularly to secure stable energy imports. However, should the conflict deepen, or if key Iranian oil infrastructure suffers irreparable damage, China's reliance on opaque supply routes and shadow trading may no longer suffice. Its medium‑term strategy of presenting itself as a credible peace broker in the Middle East faces growing strain amid diverging interests between Iran and Gulf states. China appears poised to rely more heavily on Gulf crude, yet that reliance comes with its own geopolitical calculations. Riyadh and Abu Dhabi together hold significant spare capacity – over 4 million barrels per day – which may cushion global shocks but do little to salvage China's ambition to sustain influence via energy partnerships. The unfolding developments in the Israel–Iran arena have exposed strategic fissures in a partnership that once appeared unshakeable. Even as Iran adapts tactically to maintain its export pipeline to China, Beijing must confront the reality that maintaining influence in the region demands resilience beyond discounted barrels and shadow fleets.

Arabian Post

17 hours ago

• Arabian Post

Gulf Growth Gains Amid Israel–Iran Strains

Gulf economies—led by the UAE and Saudi Arabia—are forecast to sustain stronger growth, underpinned by higher oil output and robust non-oil activity, even as tensions between Israel and Iran add volatility to the region's economic outlook. Capital Economics estimates the UAE economy will expand by approximately 5.8 percent this year, propelled by elevated oil production and expansion in tourism, finance and construction sectors. The non-oil sector continues to account for three‑quarters of national output, demonstrating effective economic diversification and a supportive fiscal framework. In Saudi Arabia, output has received a boost from OPEC+ adjustments. Riyadh, urging increased production, has reversed voluntary cuts of the past five years—liberating more oil onto global markets. This strategic move supports GDP growth, although economists caution it may obscure a weakening non-oil sector if public spending tightens. ADVERTISEMENT The Israel‑Iran confrontation has prised markets into cautious territory. Brent crude spiked above $78 per barrel before cooling slightly, driven by anxiety over possible supply shocks—from disruptions in Iran or through the Strait of Hormuz—though analysts generally see deep disruption as unlikely. Asian refiners, including in India, have shifted toward securing Middle East crude via term contracts, avoiding speculative premiums in spot markets. The UAE's stock markets reflect this duality. Following earlier losses, the Dubai and Abu Dhabi indices rebounded—rising 1.6 percent and 1 percent respectively—as hopes of de‑escalation emerged, buoyed by diplomatic mediation efforts. Nevertheless, Capital Economics warns that if the conflict deepens, Gulf growth advantages could erode. Iran's economy—roughly 0.85 percent of global GDP—might shrink by around 50 percent in a prolonged conflict, impacting trading partners; the UAE's exports to Iran alone represent 1.2 percent of GDP. A wider regional confrontation could trigger oil-price spikes, creating destabilising ripple effects. Yet projections remain cautiously optimistic. Capital Economics outlines a scenario in which hostilities subside within weeks: oil prices normalise near $65 per barrel and Gulf GDP growth remains robust. Oxford Economics likewise suggests that even in more severe oil‑shock scenarios, the macroeconomic impact may be limited and manageable. Longer‑term resilience in the Gulf is being supported by strategic diversification initiatives. UAE's efforts to expand non-oil industries through tourism, financial services and infrastructure are dovetailing with Saudi Arabia's Vision 2030—including privatisation of state assets and SME expansion to lift non-oil GDP share. Nevertheless, analysts assert that non‑oil sectors in Saudi Arabia are showing signs of strain. Early signs of contraction coincide with public spending consolidation, even as oil revenues rise. UAE diversification, in contrast, has maintained momentum, with forecasts rising from 4 percent in 2024 to 4.5 percent in 2025 and 5.5 percent in 2026. Region‑wide growth expectations have been revised upward—GCC economies are now seen expanding around 4.4 percent this year, a 0.4 point upgrade—driven by faster OPEC+ output and sustained non-oil activity in key states. Despite these positive forecasts, cautious tones persist. Market volatility has increased across bonds, equities and currencies. A protracted conflict—which includes threats to Strait of Hormuz oil shipments—could have serious economic consequences.