IEA: Global Coal Demand Set to Hit Record 8.94 Billion Tons in 2026 as Iran War Disrupts LNG Shipping

Coal is making a comeback nobody planned for. The International Energy Agency said Thursday that global coal demand will rise 1.2% in 2026 to a record 8.94 billion tonnes, reversing an earlier forecast that predicted a slight decline this year, according to the IEA's update reported by Reuters and carried by ET Energyworld and BW Energy World.

The reason is simple. Disruptions to oil and LNG shipments through the Strait of Hormuz since the US-Iran war began have pushed energy prices up, and countries with gas-fired power plants that can also burn coal are switching back to coal to keep the lights on. The IEA flagged higher-than-expected coal use in Europe, Japan, Korea and China.

Coal supply is actually shrinking. Global coal production is expected to decline this year, though it will stay above 9 billion tonnes for a third straight year, per the IEA. China, the world's largest coal producer, has cut output following safety inspections triggered by a major mine accident in May. So demand is climbing while supply tightens, a combination that doesn't end with lower prices.

Whether this is a one-year blip or the new normal depends entirely on the Strait of Hormuz. The IEA said 2027 coal demand could fall if shipping traffic recovers, or rise further if the strait stays largely closed to LNG tankers.

The War Behind the Numbers

The US-Iran war, which Epoch Times traces to a Feb. 28, 2026 outbreak of hostilities, saw a June ceasefire attempt collapse with no real progress since. Tit-for-tat strikes resumed after a relative pause in August.

Things escalated again this month. On Sept. 5, Pentagon chief Pete Hegseth posted on X that if Iran attacks US Navy ships, American forces will sink Iran's oil tankers. Iran's parliament speaker, Mohammad Bagher Ghalibaf, fired back on Sept. 7, warning that American oil and gas facilities across the Middle East are "sprawling, accessible, and exposed," and that "strike our assets and you get struck," according to Epoch Times.

Mohsen Rezaei, chief of Iran's Supreme National Security Council, said Tehran will soon announce a new restricted zone in the Persian Gulf and approve maps for a new shipping corridor through Hormuz. Any vessel entering the new zone gets added to an Iranian sanctions list, Rezaei said. He tied any reopening of the strait to the US ending what he called "sabotage, threats, and attacks" on Iran.

The price tag for American drivers is already real. AAA put average US gasoline at $4.15 a gallon on Sept. 7, with diesel hitting a record $5.90, according to Epoch Times. Crude oil has climbed back above $100 a barrel, a level last seen in May, based on market data cited by PakStock's news desk. WTI was trading near $99 and Brent near $105 as of Thursday.

The UN Track

Separately, Washington is pushing a UN resolution demanding Iran "urgently remedy its non-compliance" on nuclear inspections and restore International Atomic Energy Agency access, according to a draft obtained by Bloomberg and reported by Fox News. The US is also looking to refer Iran to the UN Security Council, with European IAEA board members backing the move.

IAEA Director General Rafael Grossi confirmed inspectors currently have no access to Iran's declared nuclear sites and no information on the status of its nuclear material. Iranian Foreign Ministry spokesman Esmail Baghaei said Tehran would retaliate if the IAEA board adopts the measures, and called the European nations backing it "irrational," arguing the war itself is what has made nuclear facilities inaccessible in the first place, according to Reuters. If US and Israeli strikes have damaged or closed off access to the sites, verifying compliance under active bombardment is a different problem than a government simply refusing inspectors entry. The IAEA's Grossi has not attributed the lack of access to either cause specifically.

US Energy Secretary Chris Wright told ABC News a nuclear agreement with Iran may not happen until the current government falls, saying "it may be simply destroying their capabilities" instead of reaching a deal.

President Trump, meanwhile, predicted on Truth Social that oil and gasoline prices will "drop precipitously" once the war ends, forecasting gas at $3 a gallon and eventually under $2. That's Trump's stated prediction, not a market forecast from an independent analyst, and it sits uneasily next to the IEA's coal numbers and AAA's current record diesel price, both of which reflect a war still very much underway.

The open question is whether Iran's proposed Gulf exclusion zone and shipping corridor plan actually gets published in the coming days, as Rezaei said it would, and how the US responds if it does. The IEA's 2027 coal forecast, and the price at the pump, hinge on that answer.