Crude oil and pure fuel 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 Sources mentioned it had doubled its half-year income because the conflict has pressured extra international locations to purchase the gasoline.
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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 monumental quantities of carbon into the environment, which contributes to world warming.
In latest months, a number of international locations, particularly in Asia, have reversed or delayed guarantees to reduce on coal manufacturing.
International coal consumption was already rising in 2025 with the Eurasia area and the US utilizing the gasoline to energy synthetic intelligence information centres, in line 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 fuel (LNG) provides have been shipped throughout peacetime.
Negotiations to reopen the strait are ongoing.
Its closure has diminished oil and fuel provides and brought on oil costs to soar, prompting many international locations to fall again on essentially the most available various to maintain the facility on – coal.
Whereas coal costs have additionally risen, the gasoline continues to be less expensive than oil – and is extra available.
No area has been extra impacted than Asia, which largely is dependent upon the Gulf for its vitality wants. About 82 p.c of oil and fuel shipments by means of the Strait of Hormuz went to Asia in 2022, in line with the US Power Data Administration. China, India, Japan and South Korea have been the highest locations.
Moreover being unable to ship exports by means of the strait, Gulf international locations caught up within the battle have additionally been badly impacted by Iranian strikes. Qatar, for instance, was pressured to declare power 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 Complicated and different vitality websites have been attacked in the course of the battle. Amenities in Saudi Arabia and Oman have additionally been hit.
The place has coal use elevated?
In keeping with 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” situation.
This represents a notable uptick contemplating that international locations are supposed to be transitioning away from coal, specialists mentioned.
Because the conflict started, a number of Asian international locations 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 gasoline 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 fuel 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 rising partly because of extra intense heatwaves, the federal government plans to launch a number of new coal-mining tasks that may see world provides improve by 2.5 billion tonnes a yr, in line 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 learn from the rising costs. Costs have 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 greater manufacturing from its Ensham mines in Queensland in addition to greater 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 – in the course of 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 main 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 probably 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 international locations, together with Indonesia and Vietnam, promised to reduce coal use on the COP26 world 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 gasoline.
Nonetheless, the Center East disaster has upset these plans largely as a result of many international locations should not have adequate 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 carry coal use when world fuel provides are disrupted as a result of the nation invested closely in coal infrastructure in latest a long time, and far of that capability has been sitting idle,” he mentioned.
“Coal turns into cheaper than imported fuel when fuel costs surge. Importantly, coal nonetheless can’t compete with renewables on price,” 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 folks died. Beijing has additionally made giant investments in renewables.
As well as, the breakdown of world fossil vitality provide chains may make clear alternate options extra aggressive and power extra international locations to spend money on them, Hedley identified.
“The lesson right here is that Asian international locations want to hurry up their shift to scrub vitality and electrification to safeguard themselves towards future world crises,” he concluded.
