Since Asian coal prices hit a 22-month high on Indonesian export cuts and surging summer demand, the region's energy squeeze has widened into the LNG market — and Wall Street is now putting hard numbers on how bad it gets.

Morgan Stanley's Warning: $25 LNG by Late 2026

Morgan Stanley analysts Devin McDermott and Martijn Rats published a report on June 9 projecting the Asian LNG benchmark price will climb to $25 per million British thermal units in Q3 and Q4 2026. According to Bloomberg, that's a 30%-plus upside to current forward curve pricing — and a level the market hasn't seen since early 2023, when Europe was scrambling to replace Russian pipeline gas.

Two forces are driving this: hotter weather across Asia cranking up air conditioning demand, and European utilities needing to restock depleted reserves heading into winter. Both are bidding for the same finite pool of LNG cargo. This creates a structural collision in the energy market.

The Coal Fallback Is Already in Motion

According to OilPrice.com, Asia's coal demand is projected to jump 70 million tonnes in 2026 specifically because LNG supply is falling short of demand. Countries that would otherwise buy LNG are defaulting to coal — it's cheaper and available.

This directly builds on what we reported last week: the Shanxi mine explosion triggered safety shutdowns across China's coking coal belt, and Indonesia's export restrictions tightened thermal coal supply. Add 70 million additional tonnes of demand pressure on top of a constrained supply picture, and the result is a sustained price spiral, not a temporary spike.

What This Means for Oil Prices Right Now

OilPrice.com's live data as of June 9 shows Brent crude at $93.40 and WTI at $90.13. Both are off slightly on the day, but the broader trend is firm. The market is absorbing the Iran-related supply constraints Trump acknowledged last week — plus the Asian energy demand surge — and holding near $90+ on WTI.

The OPEC basket is sitting at $100.60, according to OilPrice.com. OPEC's weighted average crude price is in triple digits while WTI is still in the high eighties. That spread reveals where the pressure is building.

Iran's Strait of Hormuz: A New Variable

OilPrice.com's headline feed on June 9 includes a notable development: an Iranian official reportedly said Hormuz could reopen under a new toll regime. This is no resolution — Iran is attempting to monetize its ability to choke global oil transit. Any "reopening" with toll conditions attached amounts to a geopolitical toll booth, not a normalization.

If true, it means the strait doesn't go back to free passage. It becomes a revenue mechanism for Tehran. Every barrel that transits Hormuz under that regime costs more, and that cost gets passed on.

The Mainstream Media Miss

Most energy coverage is treating the LNG crunch and the coal surge as separate stories. They're connected. When LNG gets expensive or scarce, Asia defaults to coal. When coal supply gets disrupted — Shanxi explosions, Indonesian export curbs — coal prices spike. When both are expensive simultaneously, electricity prices across Asia climb hard. That hits manufacturing costs, which hits export prices, which eventually hits the American consumer buying goods made in Asia.

The financial press is covering each commodity in isolation. OilPrice.com gets closest to connecting the dots, but even there the LNG-coal substitution dynamic isn't front and center.

Who Gets Hurt First

Pakistan is already in blackout crisis, according to OilPrice.com's headline feed. That's what happens at the front end of this crunch — countries with weak foreign currency reserves and no long-term LNG contracts get cut off first. Fishermen in Asia are struggling with fuel costs. The Malacca Strait is a pressure point for regional energy security.

For Americans, the transmission mechanism runs through fertilizer (natural gas input costs), manufactured goods (Asian energy costs embedded in production), and gasoline (crude oil prices). Trump already acknowledged last week that higher gas and fertilizer prices are a deliberate trade-off for the Iran campaign. Now add an LNG surge and a 70-million-tonne coal demand spike on top of that.

Looking Ahead

Morgan Stanley analysts Devin McDermott and Martijn Rats have projected $25 LNG by Q4 2026, 30% above where the market is currently priced. Asia will burn 70 million more tonnes of coal this year to compensate. OPEC crude is already at $100. Iran is floating a Hormuz toll regime. These pressures are compounding, not easing.