Global coal demand is set to hit a record 8.94 billion tonnes in 2026, the International Energy Agency forecasts, as countries switch from gas to coal amid Hormuz-driven supply disruption. China and India account for most of the increase, while the United States moves the opposite way.
The International Energy Agency expects global coal demand to rise 1.2% this year, reaching 8.94 billion tonnes — a record. The driver is not coal markets directly but gas markets: restricted trade through the Strait of Hormuz has pushed natural gas prices higher, and several countries are switching back to coal to fill the gap.
Gas disruption forces a coal pivot
Reduced LNG shipments through the Strait of Hormuz have squeezed supply for Japan, India, Bangladesh, the Philippines, South Korea, Thailand, Taiwan, China, and some European countries, pushing them to burn more coal. China's coal use has also risen for chemical production, driven by high oil prices.
The IEA said virtually no coal itself moves through the strait. However, tighter gas supply has pushed up prices, prompting some power systems to switch fuels. A strong El Niño pattern could add to the pressure in the coming months, with higher temperatures and lower hydropower output lifting power demand across Asia, including in India and Vietnam.
China and India lead the increase
China's coal demand is expected to climb 1% to about 5 billion tonnes. India's demand is forecast to rise 4.2% to 1.353 billion tonnes. Global coal production matched a record high in 2025 but is expected to dip slightly this year even as demand climbs.
The outlook for 2027 depends on whether Hormuz trade recovers. If LNG flows normalize, natural gas prices could fall and pull some demand back from coal. If trade stays restricted, the IEA expects global coal demand to keep rising.
The United States is the outlier
Despite policy support for coal under President Trump, U.S. coal consumption is expected to fall about 7% this year, following an unexpected jump last year. Cheap domestic natural gas has shielded the U.S. from the global gas squeeze, and new solar and wind capacity coming online has further reduced the need for coal.
The U.S. was nonetheless a major contributor to global emissions growth in 2025. According to the Energy Institute, global energy-related CO2 emissions rose 1.1% to 35.806 billion tonnes. The U.S. was responsible for about 13.3% of the increase in direct energy-related emissions. Under a broader measure including methane and flaring, the U.S. accounted for roughly a third of the global increase.
Source: Oilprice.com
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