Iran War Triggers Global Energy Market Shifts: Oil Demand Down, Coal Up in Asia-Pacific
Over 100 days into the Iran war, global oil demand is projected to drop by 1.1 million barrels per day this year before rebounding, according to the U.S. Energy Information Administration. The crisis is simultaneously driving increased coal use in Asia-Pacific due to disruptions in liquefied natural gas supplies, while UN climate officials are leveraging the situation to push for aggressive clean energy targets. The energy market volatility underscores how geopolitical conflicts reshape both fossil fuel demand and climate policy momentum.
The prolonged Iran conflict is producing measurable ripple effects across global energy markets. The U.S. Energy Information Administration reports that high fuel prices, reduced fuel availability, and government initiatives have combined to lower global oil demand by an estimated 1.1 million barrels per day in 2024, with recovery expected in 2025. Simultaneously, disruptions to Qatar's liquefied natural gas sector and elevated fuel prices are driving a significant near-term surge in coal consumption for power generation across the Asia-Pacific region. However, the crisis is also creating opportunities for clean energy advocates: UN climate officials meeting in Bonn this week are using the fossil fuel cost crisis to justify more aggressive climate targets, including a proposal for electricity to meet 35% of global energy demand by 2035. While coal is experiencing a near-term boost, analysts note the conflict may also accelerate movement toward renewables and energy storage in various regions.
What's missing
The article does not specify which countries or regions are most affected by the oil demand reduction, nor does it detail the magnitude or timeline of the projected coal surge in Asia-Pacific. Additionally, the specific mechanisms by which the Iran conflict disrupted Qatar's LNG sector are not explained.
What different sources said
- AxiosCenter
How the Iran war aftershocks are hitting oil, coal, climate
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