Pull to refresh
Logo
What Changed
Following Why Sign Up
Global coal demand set to reach record as Iran war cuts gas supplies

Global coal demand set to reach record as Iran war cuts gas supplies

Built World

IEA reverses forecast, now projects 8.94 billion tonnes burned in 2026 as LNG shortages push utilities back to coal

September 11th, 2026: Record coal demand forecast draws wide attention

Overview

Updated Sep 12

In December, the International Energy Agency projected the world would burn slightly less coal this year. Now it expects a record 8.94 billion tonnes, up 1.2%: the war with Iran has cut LNG shipments through the Strait of Hormuz, making coal the cheaper option for power generators.

China and India account for about 70% of global coal demand, and both are burning more. Global production is expected to decline this year, tightening supply and pushing prices up. If the strait stays closed to gas into 2027, demand could climb to another record — a blow to countries trying to phase out the most carbon-heavy fossil fuel.

Why it matters

If the Strait of Hormuz stays closed, coal could set another record in 2027, adding emissions just as the world tries to cut them.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

8.94 billion tonnes
Projected 2026 global coal demand
Record level, reversing the IEA's December forecast of a slight decline.
+1.2%
Year-over-year change in coal demand
Driven by LNG shortages from Hormuz disruption and a strong El Niño raising cooling demand.
70%
China and India share of global coal demand
The two largest consumers dominate the global picture.
5 billion tonnes
Projected 2026 China coal demand
Up 1% year over year, per the IEA's Coal Mid-Year Update 2026.
1.353 billion tonnes
Projected 2026 India coal demand
Up 4.2%, reversing last year's temporary drop.
€70
European TTF gas benchmark price
High gas prices make coal-fired generation economically attractive again in Europe.
-7%
Projected 2026 US coal demand change
US coal demand is expected to drop as cheap natural gas keeps coal uncompetitive.
$140.75
Newcastle coal price per tonne
Australian benchmark on Sept 11, up as supply tightens and Asian buyers compete for cargoes.
$24.81
Asian LNG spot price per MMBtu
JKM benchmark on Sept 11; high gas prices keep coal competitive for power generation.

Voices

Curated perspectives — historical figures and your fellow readers.

Sign up to generate historical perspectives on this story.

Log in Sign Up

People Involved

Donald Trump
Donald Trump
President of the United States
Overseeing US military campaign against Iran

Organizations Involved

International Energy Agency
International Energy Agency
Intergovernmental energy agency
Publishing the forecast that documents record coal demand

Paris-based agency that tracks global energy markets and publishes coal demand forecasts.

Timeline

February 2026 September 2026

6 events Latest: September 11th, 2026 · 2 months ago
Tap a bar to jump to that date

  1. Record coal demand forecast draws wide attention

    Latest News

    Coverage spreads across major outlets as analysts note the Iran war is pushing economies back to coal despite climate commitments.

  2. Coal and LNG prices climb as markets digest IEA forecast

    Market

    Newcastle coal hit $140.75 per tonne and Asian LNG spot prices reached $24.81 per MMBtu on Sept 11. High gas prices keep coal competitive for power generation.

  3. IEA releases Coal Mid-Year Update 2026

    Report

    IEA projects record coal demand of 8.94 billion tonnes for 2026, up 1.2%, reversing its December forecast of a decline. Global production is expected to decline but stay above 9 billion tonnes, as Chinese output falls after a May mine accident triggered safety inspections.

  4. US resumes large-scale strikes on Iran

    Military

    The US accuses Iran of violating the ceasefire terms regarding the Strait of Hormuz and resumes strikes; LNG shipments through the strait slump.

  5. Ceasefire memorandum signed in June

    Diplomatic

    Washington and Tehran signed a memorandum in June providing for an immediate cessation of hostilities on all fronts, including Lebanon.

  6. US and Israel launch war against Iran

    Military

    US and Israeli forces begin military action against Iran, disrupting regional shipping through the Strait of Hormuz.

Scenarios

1

Hormuz reopens, coal demand peaks in 2026

Uncertain Resolves by Mar 15, 2027

Discussed by: IEA analysts; the agency's report says the 2027 outlook depends on LNG trade resuming

If a durable ceasefire holds and LNG shipments resume through the strait, gas prices fall and utilities shift back from coal. The IEA would lower its 2027 coal forecast, making 2026 the peak year.

2

Hormuz stays closed, coal hits another record in 2027

Possible Resolves by Mar 15, 2027

Discussed by: IEA report; Bloomberg analysis noting demand could rise further next year if the strait remains closed

If the strait stays largely closed to LNG, gas prices remain high and utilities keep running coal units hard. The IEA projects demand could rise to a new record in 2027.

3

Partial LNG reopening, coal plateaus near record

Uncertain Resolves by Mar 15, 2027

Discussed by: Market analysts watching for partial LNG resumption through diplomatic channels

If LNG flows partially resume but gas stays expensive, coal demand holds roughly flat near the 2026 record rather than climbing or falling sharply.

4

Chinese production slump deepens, prices spike

Possible Resolves by Jan 31, 2027

Discussed by: IEA Coal Mid-Year Update 2026; Power Info Today analysis

China's safety inspections after a May mine accident could cut output more than expected. With demand still rising and LNG still scarce, import-dependent buyers in Japan and Korea would compete for a smaller pool of seaborne coal, pushing prices up further.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

October 1973 - March 1974

1973 Oil Embargo (1973-1974)

Arab members of OPEC cut oil exports and embargoed the US and allies during the Yom Kippur War. Oil prices quadrupled within months, forcing consumers to shift fuels and ration energy.

Then

Western economies entered recession and adopted emergency conservation measures.

Now

The shock created lasting incentives for fuel switching and led to creation of the IEA in 1974 to coordinate energy security.

Why this matters now

Shows how a geopolitical supply disruption can abruptly reorder energy consumption, the same mechanism driving the current coal shift.

2022-2023

2022 Russia-Ukraine Energy Crisis (2022-2023)

Russia cut natural gas flows to Europe after its February 2022 invasion of Ukraine. Germany and other countries that had planned coal phaseouts reactivated coal plants to keep power flowing.

Then

Europe burned more coal for two winters despite climate commitments.

Now

The episode demonstrated that energy security can override decarbonization timelines during supply shocks.

Why this matters now

Direct precedent: a geopolitical conflict squeezed gas supplies and pushed Europe back toward coal, mirroring today's shift.

March 2011

Fukushima Nuclear Disaster (2011)

The Fukushima Daiichi meltdown after a tsunami pushed Germany to accelerate its nuclear phaseout. With nuclear capacity closing, Germany leaned on coal as a bridge fuel.

Then

Coal's share of German electricity rose for several years.

Now

Germany's coal exit was pushed to 2038, and the country remains coal-dependent during its energy transition.

Why this matters now

Illustrates how a single energy policy decision can lock in coal reliance for years, similar to how the war is cementing coal's role.

Sources

(12)
+6
r/energy The Telegraph Bloomberg OilPrice.com Semafor Business Today TASS Society of Environmental Journalists EnergyReader.io Power Info Today Briefs.co International Energy Agency (via Public)