Key facts
- Global coal demand is set to hit a record high in 2026, rising 1.2% to 8.94 billion tons.
- Soaring LNG prices due to Strait of Hormuz blockages are driving the shift to coal.
- China's coal demand is expected to increase 1% to 5 billion tons in 2026.
- India's coal demand is projected to rise 4.2% to 1.353 billion tons in 2026.
- The IEA attributes the demand shift to the Middle East crisis and El Niño.
Global coal demand is poised to reach an all-time high in 2026, driven by disruptions to liquefied natural gas (LNG) supply and escalating prices, according to a new report from the International Energy Agency (IEA).
The ongoing conflict in the Middle East, which has choked LNG shipments through the Strait of Hormuz, has prompted major economies to turn to coal as a more readily available and stable energy source. Countries including China, India, Japan, South Korea, and nations in Europe are increasing their reliance on coal-fired power plants for electricity generation.
While global coal shipments have not been directly affected by the conflict, the significant slump in LNG exports has driven up natural gas prices, making coal a more attractive alternative. The IEA's Coal Mid-Year Update 2026 forecasts a 1.2% rise in global coal consumption for the year, bringing it to a record 8.94 billion tons. This upward revision reverses a slight expected drop prior to the conflict.
Both China and India, the world's largest coal consumers, are expected to see increased demand. China's consumption is projected to rise by 1% to 5 billion tons, while India's is set for a 4.2% increase to 1.353 billion tons, reversing a temporary dip from the previous year. The IEA also noted that an unusually strong El Niño weather pattern contributed to the revised forecast. If the Strait of Hormuz remains largely closed to LNG shipments into next year, the agency warned that global coal demand could continue to climb to new record levels.