Coal Demand Sees Unexpected Boost from Strait of Hormuz Disruptions

Global coal demand is set to increase in 2026 due to rising natural gas prices caused by disruptions in LNG shipments through the Strait of Hormuz. The International Energy Agency (IEA) says this has prompted some countries to boost coal-fired power generation, leading to a predicted 1.2% rise in global coal demand to 8.94 billion tonnes.

The IEA's Coal Mid Year Update 2026 notes that the Middle East is not a major coal producer or consumer, but the disruption has had an impact on LNG markets and natural gas prices. As a result, countries with gas-fired power fleets and available coal generation capacity are increasing electricity production from coal.

This trend is particularly evident in Europe, Japan, Korea, China, and other markets. China's increased use of coal to produce chemical products due to higher oil prices also contributes to the rising demand. Additionally, expectations of a strong El Niño weather pattern will support coal demand in major Asian markets like India and Viet Nam.