IEA Projects Higher Coal Demand as Strait of Hormuz Disruption Reshapes Energy Flows

The International Energy Agency said in its mid-year update that global coal consumption is tracking toward a record level this year, as trade disruptions linked to the closure of the Strait of Hormuz constrain oil and gas supplies. The agency’s assessment indicates several countries have leaned on coal to bridge supply gaps while drawing down oil inventories and continuing to build out renewable energy capacity.

The Strait of Hormuz is one of the world’s most important energy chokepoints, and its closure has tightened availability of oil and liquefied natural gas for import-dependent economies. The IEA noted that some regions are expected to see coal use rise into 2026 as elevated natural gas prices persist, particularly where utilities can switch between gas-fired and coal-fired generation.

The dynamics highlight the role coal continues to play as a dispatchable backup fuel when natural gas becomes expensive or scarce. Fuel switching of this kind typically shows up in power-sector demand first, since gas and coal plants often compete directly in the same electricity markets. At the same time, the IEA pointed to ongoing renewable capacity additions, which moderate long-term fossil fuel demand even as short-term disruptions push consumption higher.

Market participants tied to natural gas logistics moved higher in Tuesday trading. INSW closed at $104.85, up 0.51% from the prior close of $104.31, with a market capitalization of roughly $5.19 billion. NGS, a natural gas services company, gained 2.15% to $37.72 from a previous close of $36.93, valuing the company at about $486.6 million.

Shippers and midstream operators are closely watched in periods of maritime disruption, since tanker routes, freight rates, and liquefied natural gas flows can shift quickly when key transit routes are constrained. The IEA’s mid-year report suggests those pressures are already feeding through to coal demand, which the agency expects to reach an all-time high.

What to watch

• The IEA’s subsequent monthly and quarterly reports for updated coal, oil, and gas demand estimates.
• Natural gas price movements in Europe and Asia through 2026, which the agency flagged as a driver of regional coal use.
• Company earnings and contract updates from natural gas services and shipping firms, including NGS and INSW.
• Progress on renewable capacity additions that could temper coal demand over time.

Source: original release