Yemisi Izuora
Environmental impact and health concerns are mounting as global coal shipments and imports surged in March and April as buyers scrambled for fuel amid massively disrupted oil and gas supply from the Middle East.
The trend has been accelerating in recent weeks, and global coal imports are on track to reach their third-highest monthly level on record, according to estimates by analytics platform Kpler cited by the Financial Times.
In the wake of the worst oil and gas supply disruption in history, coal is back in demand, so much so that even countries and regions that believed coal use was in an irreversible terminal decline have boosted imports.
For example, last month coal shipments to South Korea, Japan, and the European Union surged by 27 per cent from a year earlier, data from BIMCO, the world’s biggest shipowners’ association, said last week.
The Asian importers and the European bloc are scrambling for alternatives to gas supply from the Middle East, currently trapped behind the Strait of Hormuz or not produced at all in Qatar, which halted LNG production as early as on March 2 and two weeks later sustained damages to the world’s largest LNG complex, Ras Laffan, from Iranian missile strikes.
“The closure of the Strait of Hormuz has disrupted LNG shipments out of the Persian Gulf and has contributed to an 8 per cent y/y drop in global seaborne LNG shipments in April,” BIMCO said.
South Korea has pushed back the retirement of coal-fired power generation capacity amid the oil and gas shock caused by the Middle East war.
Europe, for its part, is currently losing the competition with Asia for spot LNG supply, at a time when it needs to fill gas storage sites ahead of the next winter.
Energy security concerns are shifting policy responses, accelerating coal usage across key Asian and European markets, and delaying coal plant retirements, analysts at Wood Mackenzie said.