Key Points:
- A severe El Niño weather pattern will trigger extreme heatwaves in Asia and cooler summers in North America this year.
- Asian power companies will rely heavily on cheap coal imports as regional liquefied natural gas prices hit $868 per ton.
- The ongoing war with Iran has already damaged Middle East infrastructure, making global energy supplies extremely tight.
- European countries like Italy will buy expensive gas to survive severe heatwaves, driving global prices even higher.
Meteorological services predict a strong El Nino weather pattern will start next month. This climate shift will change global temperatures and rainfall. It will also force major changes in how countries consume coal and natural gas. The world already faces severe energy disruptions because the ongoing war with Iran has closed the Strait of Hormuz and damaged Middle East infrastructure. El Niño will place even more stress on these vulnerable power systems this summer.
El Niño warms the sea surface in the central and eastern Pacific Ocean. The World Meteorological Organization reports that rapidly rising water temperatures already show this pattern emerging. Pacific Ocean surface temperatures recently hit 21 degrees Celsius, or 69.8 degrees Fahrenheit. The National Oceanic and Atmospheric Administration says this marks one of the highest readings since the early 1980s. Because oceans warm slowly, this steep climb signals a very intense El Niño ahead.
Historically, El Niño brings extreme heat to Asia and Oceania. It depresses monsoon rains and triggers long heatwaves across South Asia. People will turn on their air conditioners to survive the heat, creating a massive spike in electricity use. Asia currently accounts for about 53% of all global electricity demand. This massive power draw will force utility companies to scramble for enough fuel to keep the lights on.
To keep the power flowing, Asian countries rely heavily on coal. Coal-fired plants generate about 70% of electricity in India and 55% in China. Earlier in 2026, top exporter Indonesia saw its coal shipments to Asia drop by 7%. Clean energy output and slower industrial activity caused that early dip. However, the upcoming summer heat will force power grids to burn much more coal to run millions of air conditioners. Indonesian mining companies now prepare for a rush of new orders.
Asia also buys more liquefied natural gas than any other region. Exporters might expect a huge jump in Asian gas orders, but the current market makes this difficult. Asian factories use most of this gas for industrial manufacturing rather than electricity generation. The conflict in the Middle East damaged Qatari gas plants and cut regional flows. As a result, Asian gas prices skyrocketed from $550 per metric ton before the war to $868 per ton today.
These sky-high gas prices make coal look incredibly cheap for utility companies. Indonesia sells benchmark coal for just $104 a ton, while Australia exports coal for $126 a ton. Asian power companies will choose cheap coal over expensive gas to keep their costs down. However, European power firms operate differently. They care less about high prices when their power grids fail.
Southern Europe experiences brutal heatwaves during El Niño years. Spain and Italy often see massive spikes in power demand during the summer months. Since gas-fired plants produce nearly half of Italy’s electricity, European buyers will eagerly purchase expensive gas shipments to keep their citizens cool. They will outbid Asian buyers to secure the fuel they need.
Weather patterns will look very different in North America. El Niño historically brings cooler summer temperatures to the United States and Canada. Cooler weather means Americans will run their air conditioners less often, reducing overall electricity use. This drop in domestic demand will allow the United States to export more gas and coal to desperate buyers in Europe and Africa. American energy companies anticipate strong interest from Europe as countries restock their winter gas inventories.
Other regions face their own weather emergencies. El Niño changes rainfall patterns across Latin America and Africa. Droughts will reduce water levels in massive hydroelectric dams, which usually provide a large share of electricity for both continents. To replace this lost hydro power, utility companies will need to burn more gas and invest in new renewable energy projects.
The Middle East will also experience scorching summer temperatures. Countries in the region will burn more of their own natural gas to power local cooling systems. This high domestic consumption will erode their ability to export fuel later this year, even if negotiators sign a peace deal with Iran. Every major power market will feel the impact of this extreme weather. Combined with the ongoing war, these weather shifts guarantee massive price swings for global energy fuels this year.
