IEA Warns Record Coal Demand Looming Amid Hormuz Crisis
The International Energy Agency (IEA) predicts that global coal demand will reach a record high in 2026 due to ongoing trade constraints in the Strait of Hormuz. The closure of this critical maritime route has led to increased oil and gas prices, forcing several countries to turn back to coal to fill the gap.
The IEA notes that while shipping disruptions in the Strait do not directly affect coal markets, tighter natural gas supply has pushed up prices, prompting some electricity systems to switch from gas to coal. As a result, coal consumption is expected to rise by 1.2% this year, reaching a record 8.94 billion metric tonnes.
The increase in coal demand is particularly concerning given the recent acknowledgement by the United Nations (UN) that global warming targets will likely be overshot. The UN has called for countries to 'phase down' global coal consumption, but many countries are continuing to rely on coal burning to meet rising electricity demands.