Global coal demand is forecast to climb 1.2% to a record 8.94 billion tonnes in 2026, driven by geopolitical disruption in the Strait of Hormuz and adverse weather conditions.
Reduced liquefied natural gas flows through the Strait of Hormuz have pushed gas prices higher, prompting energy producers and utilities around the world to switch from gas to coal.
The shift reflects how supply chain disruptions in one energy market can rapidly accelerate demand in another, particularly for cheaper and more accessible fossil fuels.
China remains the dominant force in global coal consumption, with demand in the country expected to reach approximately 5 billion tonnes this year alone.
India is also a major contributor to the record demand figure, with the country’s coal consumption forecast to hit 1.353 billion tonnes in 2026.
Together, China and India account for the vast majority of global coal demand, underlining how Asia continues to anchor the world’s appetite for the fuel.
Strong El Niño conditions are compounding the demand surge, with elevated temperatures increasing cooling requirements while simultaneously reducing the availability of hydropower generation.
When hydropower output falls due to drought or reduced river flows tied to El Niño, grid operators in several key markets are left with few alternatives beyond coal to fill the gap.
The combination of higher gas prices, soaring cooling demand, and weaker renewable output has created a near-perfect environment for coal consumption to reach historically elevated levels.
The United States stands as a notable exception to the global trend, with the International Energy Agency expecting American coal demand to fall by approximately 7% in 2026.
That projected decline comes despite significant policy support for the coal sector from U.S. authorities, suggesting structural market forces are outweighing political backing in domestic energy decisions.
The contrasting U.S. trajectory highlights a broader divide between Western economies, where coal is in long-term structural retreat, and Asian markets where demand continues to set new records.
The 2026 forecast reinforces concerns among climate advocates that global coal consumption shows no signs of peaking, even as renewable energy capacity continues to expand worldwide.
