Crude oil and pure gasoline provides have been disrupted worldwide by the United States-Israel conflict on Iran, however one vitality sector seems to be cashing in – coal.
This week, South Africa’s thermal coal producer Thungela Assets mentioned it had doubled its half-year income because the conflict has pressured extra nations to purchase the gas.
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Though considerable and comparatively low cost to provide, coal is taken into account one of many dirtiest fossil fuels.
Mining it causes water air pollution, and burning it releases huge quantities of carbon into the ambiance, which contributes to international warming.
In latest months, a number of nations, particularly in Asia, have reversed or delayed guarantees to cut back on coal manufacturing.
International coal consumption was already rising in 2025 with the Eurasia area and the US utilizing the gas to energy synthetic intelligence information centres, in keeping with the World Financial institution.
Right here’s what we all know:
Why is extra coal getting used?
The US-Israel conflict on Iran has triggered a worldwide vitality disaster. Quickly after strikes on Tehran started on February 28, Iran closed the Strait of Hormuz, by means of which about one-fifth of the world’s oil and liquefied pure gasoline (LNG) provides had been shipped throughout peacetime.
Negotiations to reopen the strait are ongoing.
Its closure has lowered oil and gasoline provides and brought about oil costs to soar, prompting many nations to fall again on probably the most available different to maintain the facility on – coal.
Whereas coal costs have additionally risen, the gas remains to be less expensive than oil – and is extra available.
No area has been extra impacted than Asia, which largely relies on the Gulf for its vitality wants. About 82 p.c of oil and gasoline shipments by means of the Strait of Hormuz went to Asia in 2022, in keeping with the US Power Data Administration. China, India, Japan and South Korea had been the highest locations.
Apart from being unable to ship exports by means of the strait, Gulf nations caught up within the battle have additionally been badly impacted by Iranian strikes. Qatar, for instance, was pressured to declare pressure majeure on its supply contracts in March when Iranian drones hit its Ras Laffan oil facility – the world’s largest LNG advanced – forcing it offline. Iran’s assaults had knocked out 17 p.c of Qatar’s LNG exports by March, state officers mentioned.
Equally, the United Arab Emirates’s Das Island LNG terminal, Fujairah oil terminal, Ruwais Refinery Advanced and different vitality websites have been attacked through the battle. Amenities in Saudi Arabia and Oman have additionally been hit.
The place has coal use elevated?
In response to an evaluation by the vitality information firm Ember, coal output will rise globally by 1.8 p.c by the tip of 2026 in contrast with 2025 in a “worst-case” state of affairs.
This represents a notable uptick contemplating that nations are supposed to be transitioning away from coal, consultants mentioned.
Because the conflict started, a number of Asian nations have introduced plans to extend coal-fired electrical energy technology.
Japan has lifted restrictions on older, high-emission coal vegetation to deal with the vitality shocks whereas South Korea has delayed the shutdown of coal-powered vegetation it promised to wind down by 2040.
In Bangladesh, the federal government at first imposed energy cuts, closed universities and rationed gas gross sales for autos earlier than asserting it had ramped up coal-powered electrical energy technology.
Thailand, the Philippines and Vietnam have additionally elevated coal-powered electrical energy technology to protect dwindling gasoline reserves.
In Pakistan, information from the Nationwide Electrical Energy Regulatory Authority confirmed that by July, electrical energy generated from imported coal had risen by 90 p.c in contrast with the identical interval the earlier yr.
China and India already eat 70 p.c of the world’s coal and are additionally main producers. In India, the place electrical energy demand is growing partly as a consequence of extra intense heatwaves, the federal government plans to launch a number of new coal-mining tasks that can see international provides enhance by 2.5 billion tonnes a yr, in keeping with the International Power Monitor.
Germany additionally mentioned it received’t jeopardise electrical energy technology due to earlier local weather guarantees it made whereas Italy has pushed again its coal phase-out plans from late 2025 to 2038.
Who’s making a revenue from coal?
Indonesia is the highest coal exporter by a large margin, adopted by Australia and Russia.
In March, Jakarta reversed earlier plans to curb coal manufacturing and scale back oversupply in a bid to profit from the rising costs. Costs had been set at $131.85 per tonne in July, in contrast with $102.20 within the earlier yr.
South Africa’s Thungela, in the meantime, reported doubled income from January to June, in contrast with the identical interval of 2025, pushed largely by larger manufacturing from its Ensham mines in Queensland in addition to larger demand and better costs at each Ensham and its South Africa operations.
Manufacturing at Ensham rose by 38 p.c within the first half of the yr – through the peak of the battle – to 2.2 tonnes, in contrast with 1.6 tonnes within the earlier interval.
The corporate reported 4.80 South African rand ($0.30) in headline earnings per share – or HEPS, a major metric of profitability utilized in South Africa. That’s up from 1.92 rand ($0.12) in June final yr.
In an announcement, Thungela mentioned costs will possible stay excessive as European and Asian markets put together for winter.
What does this imply for the drive for clear vitality?
In 2021, greater than 40 nations, together with Indonesia and Vietnam, promised to cut back coal use on the COP26 international local weather summit. India and China didn’t enroll, nonetheless. Final yr, South Korea joined the Powering Previous Coal Alliance, which helps coal-dependent economies transition away from the gas.
Nevertheless, the Center East disaster has upset these plans largely as a result of many nations shouldn’t have ample renewable energy-generating capability to fall again on, mentioned Nick Hedley, an vitality transition analyst at South Africa-based Zero Carbon Analytics.
“For the likes of Bangladesh, it’s straightforward to raise coal use when international gasoline provides are disrupted as a result of the nation invested closely in coal infrastructure in latest many years, and far of that capability has been sitting idle,” he mentioned.
“Coal turns into cheaper than imported gasoline when gasoline costs surge. Importantly, coal nonetheless can not compete with renewables on value,” Hedley added.
It’s not all doom, nonetheless. Analysts famous that upticks in some locations are being offset by long-term declines in coal use in locations like Europe.
China’s home coal manufacturing additionally fell this yr as the federal government tightened oversight following a lethal explosion in Could on the Liushenyu coal mine, the place 82 individuals died. Beijing has additionally made giant investments in renewables.
As well as, the breakdown of world fossil vitality provide chains may make clear options extra aggressive and pressure extra nations to spend money on them, Hedley identified.
“The lesson right here is that Asian nations want to hurry up their shift to scrub vitality and electrification to safeguard themselves in opposition to future international crises,” he concluded.
