Global coal demand forecast to rise by 1.2% in 2026 to a record 8.94 billion tonnes due to Middle East conflict, IEA says
Global coal demand is forecast to rise by 1.2% in 2026 to a record 8.94 billion tonnes due to the Middle East conflict, the International Energy Agency said on Thursday.
The International Energy Agency (IEA) has forecast that global coal demand is set to increase by 1.2% in 2026, reaching a record 8.94 billion tonnes. This surge is attributed to the ongoing Middle East conflict, which has disrupted oil and liquefied natural gas (LNG) shipments through the Strait of Hormuz since the U.S.-Iran war began.
The IEA notes that the price hikes have led to higher electricity generation from coal in countries with gas-fired power fleets and excess coal capacity. Demand for coal has been higher than expected in Europe, Japan, Korea, China, and other markets.
Initially, the IEA had projected a slight decline in global coal demand this year. However, there is uncertainty about demand next year, as it hinges on the recovery of shipping traffic through Hormuz. If traffic returns to normal, coal demand could decrease in 2027. Conversely, if the strait remains largely closed to LNG shipments, coal demand might continue to rise further, according to the IEA.
On the production front, global coal output is anticipated to decline this year. Nevertheless, it is expected to stay above 9 billion tonnes for the third consecutive year. China, the world's largest coal producer, has seen a dip in output due to safety inspections following a major mine accident in May. This incident has significantly reduced coal production in the country.
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