Iran supply shock pushes Asian coal generation to four consecutive monthly gains
LNG disruptions through the Strait of Hormuz drove Japan, South Korea and China to burn sharply more coal in April, displacing roughly four LNG cargoes in Japan alone.
Japan's gas-based electricity supply fell to its lowest level in two years in April (2026-04-30), Kyodo reported, as Iranian retaliation to U.S.-Israeli strikes cut roughly 17% of Qatar's LNG export capacity, removing supplies from the world's second-largest LNG exporter from global markets. Japanese utilities covered the shortfall with coal, with the additional generation displacing approximately four LNG cargoes in the month, according to Fei Xu, senior gas analyst at ICIS — about half the annual import reduction the Japanese government had previously expected from a broader, planned shift to coal.6
Four displaced cargoes in a single month is the more telling figure. Japan imports roughly 65 to 70 LNG cargoes per month in peak periods; accelerating that switch under duress, rather than policy, compresses years of planning into a crisis response. JKM spot LNG stood at $16.53 per MMBtu as of early Tuesday (2026-07-14), maintaining levels that have kept coal switching economical across the region.6
South Korea moved along the same lines. Both countries sharply increased coal-fired generation through April and into early May (2026-05), according to market data cited by Kyodo. Andre Lambine, electricity analyst at S&P Global Energy, was direct about the forward path: "The longer this war continues, the more shifts we will see."6,4
China's April data, compiled by the Centre for Research on Energy and Clean Air, showed total power generation up 6.6% year-on-year, with coal power rising for the fourth consecutive month. Shipping disruptions through Hormuz cut China's crude oil imports by around 20% year-on-year and natural gas imports by roughly 13% in April, pushing utilities toward domestic coal at a moment when Chinese mine output was already at record levels. Bloomberg reported on Tuesday (2026-05-19) that China's coal production reached 4.83 billion tonnes in 2025, up 1.2% on official data.1,5
New thermal power capacity commissioned in China in the first quarter of 2026 surged more than 160% year-on-year to a record high. Solar additions fell 31% against a high prior-year base, while wind additions rose 8%. The commissioning surge had been planned before the conflict; the conflict accelerated its utilisation.1
Vietnam added to the regional picture. Coal-fired electricity generation there rose 12.3% in April to a record 17,864 gigawatt-hours, government figures showed, driven by a regional heatwave that lifted demand beyond what gas-fired capacity could meet.6
Globally, coal-fired generation rose by about 91 terawatt-hours, or roughly 13%, in the period under review, according to IEA data. The International Energy Agency's Electricity 2026 report, cited by Argus Media on Wednesday (2026-05-20), projects coal's share of the generation mix declining over the rest of this decade as nuclear, renewables and natural gas expand — with renewable output growing by around 1,000 TWh annually through 2030. The near-term trajectory is running against that forecast.2
In the United States, where LNG export disruption registers as a revenue loss rather than an import crisis, coal retained its competitive position for a different reason. EIA data showed the dark spread in MISO — the difference between the wholesale electricity price and the fuel cost of coal-fired generation — increased 111% in 2025 compared with 2024, as electricity prices rose faster than coal costs. That dynamic is domestic, not Hormuz-driven, but it reinforces the broader pattern.3
API2 coal front-month prices carry a bearish supply signal, and JKM spot is also under modest bearish supply pressure, suggesting some market participants expect normalization as the conflict eventually eases. How much Hormuz LNG throughput recovers before northern hemisphere winter demand rises in October will be the figure Asian power desks are watching most closely.6