Global Coal Demand Surges to Record 8.94 Billion Tonnes in 2026 Amid Middle East Conflict
The International Energy Agency (IEA) has revised its forecast for global coal consumption, projecting a 1.2 % increase in 2026 to a record 8.94 billion tonnes. The rise follows a sharp uptick in coal use in Europe, Japan, South Korea, China and other markets, driven by higher electricity generation from coal as gas‑fired power plants are constrained by rising natural‑gas prices.
The IEA attributed the surge to disruptions in oil and liquefied natural‑gas (LNG) shipments through the Strait of Hormuz, a passage that has been closed to LNG tankers since the U.S.–Iran war began in 2022. The closure has pushed Brent crude above $100 a barrel and LNG prices in Asia above $25 per MMBtu, according to the agency’s analysis. Higher fuel costs have encouraged utilities in countries with spare coal capacity to shift from gas to coal to meet electricity demand.
"Disruptions to oil and LNG shipments through the Strait of Hormuz have driven up prices and encouraged higher electricity generation from coal in countries that have gas‑fired power fleets and spare coal capacity," the IEA said in its mid‑year update. The agency noted that coal use in Europe, Japan, Korea and China has exceeded previous expectations.
The IEA had originally forecast a slight decline in global coal demand for 2026. The new projection reverses that trend, reflecting the impact of the Middle East conflict on energy markets. The agency also warned that demand in 2027 will depend on whether shipping traffic through Hormuz recovers. If the strait reopens, coal demand could fall; if it remains largely closed to LNG, demand could rise further.
Global coal production is expected to decline in 2026 but remain above 9 billion tonnes for a third consecutive year, the IEA added. China, the world’s largest coal producer, has seen output fall after safety inspections following a major mine accident in May. The inspections have led to a significant reduction in coal production, according to the agency.
The IEA’s forecast is part of a broader assessment of how the Middle East conflict is reshaping global energy supply chains. The Strait of Hormuz is a critical route for 20–25 % of the world’s LNG and a major channel for oil destined for Europe and Asia. Its closure has increased supply risk and price volatility, prompting a shift toward coal in several electricity markets.
The agency’s data also show that coal demand in India is expected to return to its historical growth trend in 2026, driven by rising electricity demand despite the country’s rapid expansion of renewable capacity.
The IEA’s findings have implications for governments and investors. Countries that rely on gas for power generation may face higher operating costs, while coal‑dependent utilities may see increased demand for coal imports. The shift could also affect emissions trajectories, as coal is a higher‑carbon fuel than natural gas.
The IEA’s report underscores the interconnectedness of global energy markets. Disruptions in one region can ripple through supply chains, alter fuel mix decisions, and influence consumption patterns worldwide.
In summary, the IEA’s updated forecast shows that global coal demand will reach a record 8.94 billion tonnes in 2026, driven by higher prices for oil and LNG and the resulting shift to coal in several electricity markets. The trend will hinge on the status of the Strait of Hormuz in 2027, while China’s production decline and the broader energy security context will continue to shape the coal market.
