The Iran War Is Pushing Global Coal Use to Record Highs
Five years after virtually every world leader agreed to “phase down” the burning of coal for climate reasons, the fuel is more widely used than ever.
The International Energy Agency (IEA) has reported that global coal demand is expected to reach a record high in 2026, driven by soaring LNG prices resulting from the blockage of the Strait of Hormuz due to the ongoing Iran war. The Middle East, being a minor exporter of coal, did not experience direct market disruptions when the conflict began over six months ago.
However, the closure of LNG shipments from the Strait of Hormuz has led to a significant increase in LNG and gas prices, prompting utilities to rely more on coal-fired generation. As a consequence, global coal demand, which was previously anticipated to decline this year, is now projected to increase by 1.2%, reaching a record 8.94 billion tons.
The primary catalyst for this surge in coal demand is the severe disruption in natural gas supply caused by the Middle East crisis and an unusually strong El Niño weather pattern. China and India, the world's two largest coal consumers, are expected to see a rise in demand. Chinese coal demand is projected to increase by 1% to 5 billion tons, while India's demand will grow by 4.2% to 1.353 billion tons, marking a reversal in last year's slight decrease.
If the Strait of Hormuz remains obstructed to LNG shipments well into the following year, global coal demand might surpass another record high.
Written by urgent.news from OilPrice's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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