Global natural gas volatility and rising coal demand

In 2025, global natural gas demand and supply both reached record highs, with North America becoming the leading exporter. However, the market entered a period of significant volatility in 2026 due to a crisis in the Strait of Hormuz that disrupted approximately 20% of global LNG supply. This instability was compounded by missile strikes on Ras Laffan infrastructure in Qatar, leading QatarEnergy to declare force majeure and suspend the North Field expansion project.

As a result of these supply shocks, analysts projected the first annual decline in global gas demand since 2022. While the Middle East was forecasted to see a significant decline in demand, growth in North America was expected to partially offset regional production decreases. Despite short-term market volatility and a contraction in global gas trade, long-term structural growth prospects remain supported by significant investments in liquefaction and regasification projects.

By September 2026, the disruption to LNG shipments through the Strait of Hormuz has contributed to rising natural gas prices, triggering a shift in energy consumption. According to the International Energy Agency (IEA), global coal demand is now projected to rise by 1.2% in 2026, reaching a record 8.94 billion tonnes. This surge is driven by regions with dual-fuel power plants—including Europe, Japan, South Korea, and China—which are turning to coal for electricity generation as gas becomes more expensive. This trend is expected to persist through 2027 unless maritime traffic in the Strait of Hormuz recovers and gas prices stabilize.