Coal Prices and Producer Profits Rise as Iran War Disrupts Oil and Gas Supplies
Business & MarketsWell-covered
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The Facts
- South Africa's thermal coal producer Thungela Resources reported that its half-year profits doubled.
- Reports say Iran closed the Strait of Hormuz following strikes that began in late February.
- Roughly one-fifth of global oil and liquefied natural gas supplies pass through the Strait of Hormuz.
- Several countries, particularly in Asia, have increased coal-fired generation or delayed shutting coal plants.
- Global coal consumption was already rising in 2025, partly to power artificial-intelligence data centres.
- Coal is among the most polluting fossil fuels, releasing large volumes of carbon when burned.
- Chinese coking coal futures in Dalian rose about 15% in a week, the highest since October 2024.
- A fatal explosion at a Shanxi province coal mine in late May has tightened China's coking coal supply.
- Global seaborne thermal coal flows fell 2.3% year on year to 87.3 million tonnes in July 2026.
Context
Why would a disruption to oil and gas supplies benefit coal?
Higher petroleum and gas prices have prompted governments to substitute a fuel that is abundant, relatively cheap to produce and readily available for power generation Al Jazeera Online,RocketNews | Top Ne…. Asia has been most affected because the region historically depended heavily on Gulf energy exports shipped through the Strait of Hormuz News18,RocketNews | Top Ne….
Who is being hurt by rising coal prices?
Indian steel mills face margin pressure as coking coal costs climb, according to executives and analysts cited by Reuters. India meets 95% of its coking coal needs through imports, at least half from Australia, and coking coal accounts for nearly 40% of steel production costs. Premium hard coking coal averaged $236 per metric ton FOB Australia in the first seven months of 2026, up 25% from a year earlier Reuters.
Do trade figures confirm a broad coal boom?
The picture is mixed. Total seaborne coal flows rose just 1.0% year on year in July 2026, with thermal coal down 2.3% on weaker European and US demand while metallurgical coal jumped 11.8% Hellenic Shipping N…,American Journal of…. Individual producers are reporting strong volumes: Yancoal Australia posted a first-half production record of 19.8 Mt and a 13% revenue increase to A$3.024 billion, though its after-tax profit fell 90% on non-operating items news.metal.com.
Where Left and Right agree, and where they split
- Where Left and Right agree
- Both treat dependence on a single waterway as a design failure — neither disputes that Hormuz's closure alone reshaped Asia's generation mix, or that no power system should be that hostage-able.
- Where Left and Right split
- Left and right agree one waterway shouldn't hold the grid hostage — they split on which fuel fixes that.
How left and right read it
A power system that can be knocked into coal by one waterway is a system built to fail the people who pay its bills. Roughly a fifth of global oil and gas moves through Hormuz, so its closure was enough to push countries across Asia to burn more coal or keep old plants running — while a thermal coal producer doubled its half-year profits. Consumption was already climbing to feed data centres. The lesson is not to prolong the most carbon-heavy fuel we have; it is to build the clean capacity and efficiency that no chokepoint can hold hostage.
Energy sovereignty starts with fuel you can dig up at home, under your own law and your own flag. Roughly a fifth of the world's oil and LNG moves through Hormuz, so when Iran closed it, governments across Asia leaned on coal-fired generation and delayed closures rather than let power systems fail — with demand already climbing to run AI data centres. Keep that capacity. Retire nothing a chokepoint can hold hostage.
This isn't really a story about coal prices — it's about whether energy security means burning what you own or building what nobody can blockade.
The receipts — all 30 sources
Wire services (1)
Independent coverage (29)
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