Most major meteorological agencies in the world predict that a strong El Nino phenomenon will form from next May, affecting global temperatures and rainfall trends, while promoting changes in coal and natural gas consumption in many key areas.
In the context of a serious disruption to global energy flow due to the blockade of the Strait of Hormuz and damage to energy infrastructure in the Middle East, the appearance of El Nino this summer could put more pressure on the power sector.
Historically, El Nino often led to higher than normal temperatures in most of Asia and Oceania, and could also lead to intense and prolonged heat waves in South Asia.
Therefore, the demand for cooling systems in the summer of 2026 is forecast to increase in Asia - the region accounting for about 53% of global electricity demand, according to the energy research organization Ember.
Asia's power system is heavily dependent on coal for power generation. Coal-fired power plants currently supply about 70% of electricity in India and about 55% in China as well as across Asia.
Higher electricity consumption in Asia this year is therefore a positive sign for coal exporting countries, especially Indonesia - the world's largest coal exporter.
Since the beginning of 2026, Indonesia's total coal exports to Asian countries have decreased compared to the same period in 2025, due to increased electricity production from clean energy sources and reduced energy consumption in key industries such as cement.
However, in the near future, increased demand for air conditioners across Asia as El Nino forms may lead to increased demand for coal and coal imports.
Because Asia is also the world's largest consumer of liquefied natural gas (LNG), LNG exporters may be expecting more orders from Asia to increase as temperatures rise amidst El Nino.
However, in Asia, LNG is used more in the industrial sector rather than in power generation. Therefore, LNG exporters may not benefit as much as the coal industry.
In addition, after the LNG supply from Qatar was cut and the country's LNG plants were damaged, LNG prices in Asia increased sharply from about 550 USD/ton right before the Iranian conflict broke out to about 868 USD/ton currently.
The recent decline in LNG supply from Qatar has pushed LNG prices in Asia to skyrocket, significantly higher than coal prices in the region.
Indonesia's standard export coal price is 104 USD/ton, while coal exports from Australia are 126 USD/ton. Therefore, LNG is likely to be considered too expensive for power companies.
In general, although Asian countries are likely to be most severely affected if El Nino strongly occurs this year, all major power markets in the world could be affected if global weather fluctuates for a long time.
The global power system is already tense due to the Iranian conflict. Fuels such as coal and natural gas may face even greater shortages and price volatility if El Nino causes heat waves and electricity demand surges like in previous years.
