Global coal demand is expected to rise 1.2 per cent in 2026 to a record 8.94 billion tonnes, as disruptions to oil and liquefied natural gas (LNG) supplies through the Strait of Hormuz push some countries towards greater coal-fired electricity generation.
The International Energy Agency (IEA) had previously expected global coal consumption to decline slightly this year. However, higher-than-anticipated coal use in Europe, Japan, Korea, China and other markets has reversed that outlook.
Disruptions to oil and LNG shipments through the Strait of Hormuz following the outbreak of the US-Iran war have driven up energy prices. Countries with gas-fired power fleets and spare coal-generation capacity have consequently increased coal use.
Hormuz Disruptions Drive Coal Demand Higher
The outlook for 2027 remains dependent on the restoration of shipping through the Strait of Hormuz. If traffic recovers, global coal demand could decline next year. If the strait remains largely closed to LNG shipments, coal consumption could increase further.
The disruption illustrates the impact of constraints in global gas supplies on electricity generation, particularly in markets that retain the ability to switch between gas and coal.
Global Coal Production To Remain Above 9 Billion Tonnes
While demand is forecast to reach a record in 2026, global coal production is expected to decline during the year. Output, however, is projected to remain above 9 billion tonnes for a third consecutive year.
China, the world's largest coal producer, has recorded lower production following safety inspections introduced after a major mine accident in May. The inspections have resulted in a significant reduction in domestic coal output.
(Reuters inputs)