Major Asian LNG buyers are turning back toward coal as the Iran war keeps pressure on fuel supplies and prices, creating a fresh economic aftershock far from the Strait of Hormuz.
Reuters reported that Japan and South Korea, two of the world’s largest liquefied natural gas importers, increased coal-fired power generation in April and early May after the conflict disrupted Middle East LNG flows and drove gas prices sharply higher.
The shift is a new layer of the Iran crisis: what began as a military and shipping emergency in the Gulf is now changing how power grids in East Asia are being fueled.
Japan and South Korea Are Burning More Coal
In Japan, coal-fired power supply rose 11.1% in April, the fastest pace in at least a year, while gas-fired power dropped 12.9% to 16,447 gigawatt-hours, Reuters reported, citing the Japanese Electricity Market Data Hub.
South Korea’s move was even sharper. Coal-fired power supply rose 39.7% year over year to 10,733 gigawatt-hours in April, the biggest increase since August 2019, while gas-fired output fell 6.4%, according to Korea Power Exchange data cited by Reuters.
The pattern continued into early May. Reuters said coal-fired supply was up 18.3% in Japan and 14.7% in South Korea during the first 10 days of the month, while gas-fired power fell 23.4% and 12.2%, respectively.
The LNG Price Shock Is Driving the Switch
The basic math is brutal. Asian spot LNG prices have risen 62% since the start of the war, while the Newcastle coal benchmark has climbed 13%, according to Reuters. That gap gives utilities a clear incentive to lean on coal where they still can.
OilPrice.com also reported that spiking LNG prices and reduced Middle East supply have pushed Japan and South Korea to raise coal generation and coal imports, noting that the global coal supply chain has not been hit the same way as LNG routes tied to the Gulf.
The Reuters report said Iranian retaliation to U.S.-Israeli attacks had knocked out 17% of Qatar’s LNG export capacity, tightening supply from one of the world’s most important gas exporters. Japan and South Korea normally use LNG to help manage nuclear maintenance periods before summer electricity demand rises.
Coal Imports Are Rising Too
The change is not just visible inside power plants. Reuters reported that May coal imports by Asian buyers outside China and India are set to rise 9.4% year over year to 31 million metric tons, citing London-based DBX Commodities.
South Korea’s coal imports are on track to rise by more than 50% in May, while Japan’s are expected to climb by more than 20%, Reuters reported. Vietnam’s electricity-grade coal imports also hit a record 5.4 million tons in April, according to Kpler data cited in the same report.
For energy markets, this matters because it shows the Iran war is not only rerouting tankers or raising oil prices. It is also pushing governments and utilities into short-term energy-security choices that can cut against climate goals.
Why This Is a New Iran Crisis Flashpoint
Until now, much of the crisis coverage has focused on military escalation, Strait of Hormuz transit, oil prices, and ceasefire diplomacy. This development adds a different pressure point: power security in countries that depend heavily on imported LNG.
If LNG cargoes remain expensive or constrained, coal becomes the fallback. That gives Japan and South Korea more breathing room for electricity supply, but it also shows how quickly a Gulf war can reshape decisions thousands of miles away.
The immediate risk is that a longer conflict locks in more emergency fuel switching across Asia. The larger warning is uglier: even countries trying to reduce coal use can be dragged backward when war makes gas unreliable.