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Asia Turns Back to Coal as Iran War Chokes LNG Through Hormuz

Disrupted Gulf shipping has exposed Asia's reliance on imported fuel.

FILE - The Ilijan liquified natural gas plant is visible with Verde Island, in the distance, along the coast of Ilijan, Batangas province, Philippines on Aug. 11, 2023. (AP Photo/Aaron Favila, File)
FILE- A boat cruises past a coal barge on Mahakam River in Samarinda, East Kalimantan, Indonesia, on Dec. 19, 2022. (AP Photo/Dita Alangkara, File)
FILE- A laborer smiles as she takes a break from loading coal into a truck in Dhanbad, an eastern Indian city in Jharkhand state, on Sept. 24, 2021. (AP Photo/Altaf Qadri, File)
FILE - A worker throws his cigarette on a truck parked in front of a cooling towers of a coal-fired power plant in Dadong, Shanxi province, China, on Dec. 3, 2009. (AP Photo/Andy Wong, File)

Overview

  • Power producers across Asia are raising coal output to plug LNG gaps, with India burning more, South Korea lifting coal caps, and Thailand preparing two idled units to restart.
  • Governments are loosening controls to keep energy flowing, as seen in India pausing air-quality rules that even allow restaurants to burn coal during a gas shortfall.
  • Qatar said Iranian attacks cut its LNG export capacity by 17% and it warned it may declare force majeure on some long-term supply contracts.
  • Indonesia is channeling more coal to domestic users, a move that has tightened regional supply and pushed Asia’s Newcastle benchmark price up about 13%.
  • Analysts say the crunch highlights weak gas storage and heavy import dependence across Asia and could steer policy toward renewables that are less exposed to global chokepoints.