Iran War Sparks Coal Surge in Asia Amid LNG Shortages
The ongoing Iran war is having far-reaching effects on global energy markets, particularly in Asia. The conflict has disrupted liquefied natural gas (LNG) supplies and driven up prices by 62% since its start, according to Reuters.
Major Asian LNG importers Japan and South Korea are increasing their use of coal-fired power generation due to the shortage. In April, Japan's gas-fired power supply hit a two-year low, while South Korea's dropped to a six-month low, data from the Japanese Electricity Market Data Hub and Korea Power Exchange (KPX) showed.
Japan's coal-fired power output surged 11.1% in April, displacing roughly four LNG cargoes, which is about half the annual imports the government aimed to avoid by using more coal. South Korea's coal-fired power supply rose 39.7% annually to 10,733 gigawatt-hours (GWh) in April.
Nuclear supply fell in both countries, but was offset by an increase in coal-fired output in May. S&P Global Energy analyst Andre Lambine said that the longer the war continues, the more switching between gas and coal will occur.