The world is on track to burn more coal than ever this year. In a report published Thursday, the International Energy Agency said global consumption is set to climb 1.2% to 8.94 billion tons. That comes even as wind and solar keep expanding.
Those additions are slowing how fast fossil fuels would otherwise grow, but they are not yet enough to push them into decline given rising electricity demand worldwide. The IEA also cautioned that without a steep pullback in fossil fuel use, the consequences of a hotter planet will keep worsening.
Here is the twist: almost no coal moves through the Strait of Hormuz, yet turmoil there has still shaken coal markets. A sharp drop in LNG cargoes moving via the Strait has pushed up gas prices, prompting greater coal-fired output in places with gas plants and available coal capacity. That gas to coal switching has shown up in China, South Korea, Japan and Europe.
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This year's strong El Nino is boosting air-conditioning demand and, at the same time, cutting hydro generation in India and Vietnam. Both forces pull more weight onto coal.
The outlook for LNG flows through the Strait of Hormuz remains unclear. The IEA says coal use could fall next year if the Strait reopens and LNG shipments recover to about their levels that existed prior to the US and Israeli attacks on Iran. If not, 2027 could mark another record for the fuel. The agency also noted it has reworked its longer term view: at the end of last year, it expected coal demand to slip slightly in 2026 and then keep falling through 2030, but resiliency in consumption has forced a rethink.
Bottom line for your wallet: energy prices are being tugged by weather patterns, shipping routes and the pace of renewable buildout - factors that can swing power costs and emissions trends where you live.
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