Coal as Asia's Shock Absorber: Seaborne Thermal Coal during the 2026 Gulf LNG Outage
Almost no coal moves through the Strait of Hormuz. The Middle East is neither a large producer nor a large consumer of the fuel, and the International Energy Agency says as much in its Coal Mid-Year Update 2026. Yet coal has ended up as one of the quieter casualties, and beneficiaries, of the war that began at the end of February. When LNG tankers stopped leaving Qatar and the United Arab Emirates, gas prices in Asia and Europe jumped, and power systems with idle coal units began to lean on them.
The result is a year in which the IEA has had to reverse its own forecast of falling global coal demand. Understanding how that happened, and how much of it is likely to unwind, matters for every Asian importer now planning for winter 2026-27. According to the IEA Strait of Hormuz factsheet, just over 112 billion cubic metres of LNG transited the Strait in 2025, almost 20 per cent of global LNG trade. Coal-fired power generation accounted for 5,954 million tonnes of the 8.84 billion tonnes of coal consumed worldwide in 2025, and in systems that own both gas and coal fleets, the relative price of the two fuels decides which plant runs.
The headline effect is a 1.2 per cent rise in global coal demand in 2026 to a record 8.94 billion tonnes, compared with 8.84 billion tonnes in 2025. In December 2025 the IEA's annual Coal Market Report had expected a small decline this year. In Korea, the IEA now expects coal demand to rise by 6 per cent to 119 million tonnes, reversing an earlier expectation of decline. Japanese coal demand is still expected to fall by 1 per cent to 161 million tonnes, because industrial consumption is weakening.
China, the dominant force in the market, matters more for what it did not do. Chinese coal demand is expected to rise by 1 per cent to 5 billion tonnes, with higher LNG prices, strong electricity demand and weak wind generation all supporting coal burn. Put together, these regional moves leave seaborne thermal coal demand projected at around 1,062 million tonnes in 2026, slightly below the roughly 1,074 million tonnes of 2025. The price signal in coal has been much weaker than in gas or oil.
For Pakistan and Bangladesh the picture is less comfortable than for Japan or Korea. Ground News, which aggregates ratings from AllSides, Ad Fontes Media and Media Bias/Fact Check, classes the outlets covering this story as 33% left-leaning, 17% centre and 50% right-leaning (2 sources, 1 source and 3 sources respectively, excluding outlets without a bias rating).