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IEA projects record coal demand as LNG supply tightens
The IEA forecasts global coal consumption will reach 8.94 billion tons in 2026, up after LNG shipments through the Strait of Hormuz slumped.
Rising LNG prices linked to the Strait of Hormuz disruption are pushing utilities to lean more heavily on coal, a shift the International Energy Agency projects will lift coal demand to record levels this year, according to an IEA Coal Mid-Year Update 2026 summarized by OilPrice.
The report says the Middle East is not a major coal exporter, so coal shipments were not disrupted when the Iran war began more than six months ago. By contrast, LNG shipments out of the Strait of Hormuz slumped materially, tightening gas supply and raising LNG and gas prices.
As a result of the energy supply dislocation, the IEA now projects global coal demand will rise by 1.2% in 2026, reversing an earlier expectation that demand would slightly fall. That increase would bring global coal consumption to a record 8.94 billion tons.
The IEA also attributes the forecast change mainly to the Middle East crisis and an unusually strong El Niño weather pattern, and it expects demand growth in the two largest coal consumers. China is forecast to see a 1.0% increase to 5 billion tons, while India is expected to rise 4.2% to 1.353 billion tons, reversing a temporary dip last year.