IEA: Middle East conflict drives renewed global increase in coal-fired power generation
AI Market Summary
IEA flags a structural energy supply shock: a normalized blockade of the Strait of Hormuz from Mar 2026 disrupts ~20% of global LNG flows, lifting gas prices ~30% and forcing power generators to switch back to coal. Higher coal burn raises power-sector CO2 emissions and tightens fuel-market balances. Near term, the report increases risk premia across gas/LNG-linked assets and power-input costs.
Impact level
● High
Affected assets
NCCO7241NATGAS2USD/USDT-0.41%
AI Insight · NCCO7241NATGAS2USD/USDTAI Insight
▼ Bearish
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A report from the International Energy Agency (IEA) said the U.S.-Iran conflict in the Middle East has led to a sustained closure of the Strait of Hormuz starting in March 2026, disrupting 20% of global liquefied natural gas (LNG) shipments. The shock has lifted natural gas prices by 30%, prompting power producers in multiple countries to switch generation back to coal. The IEA projects global coal-fired electricity output will rise 1.4% in 2026, while power-sector carbon dioxide emissions increase 1%. The agency described the development as a material supply shock for coal, natural gas and LNG-related assets.
