LONDON (Realist English). While the world watches missile strikes in the Strait of Hormuz and record oil prices, a fire is quietly but surely spreading on the second front of the energy war – the coal market. In the two weeks since the Middle East conflict began, thermal coal prices have risen 11-17% on the back of oil and gas prices, and Germany, Poland and Japan are panickingly revisiting “dirty fuel”.
But behind this euphoria lies a harsh truth: the coal industry is singing its “swan song”, and Russian exporters are sitting on record prices but cannot ship their product due to soaring freight costs and paralysed trade.
Prices: how the war heated up “black gold”
Against the backdrop of the Hormuz blockade and the oil price surge to $115 per barrel, coal – traditionally viewed as a cheap alternative to gas – has received a powerful boost. The mechanism is simple: oil prices push up the cost of LNG linked to long-term contracts, and expensive gas makes coal attractive for power generation. According to industry indices as of 4–5 May 2026:
| Region / coal grade | Price (USD/t) | Change since start of war (from 20 April) |
| Australia, Newcastle (6,000 kcal), index | $130.8 | +12.6% |
| Australia, mid-calorific (5,500 kcal) | ~$97.5 | +11.7% |
| Indonesia, low-calorific (4,200 kcal) | $61.8 | +11.6% |
| South Africa, RB3 (FOB) | $95–96 | — |
| Russia, Far East (6,000 kcal, FOB) | $92.9 | +6.6% in April |
| ICE Newcastle, futures | $139.2 (4 May) | — |
Russian coal shipped via Far East ports has risen almost 7% in April, but as we shall see, these figures mean nothing to real exporters. They are forced to refuse contracts because they physically cannot ship the product.
Coking coal: China’s deficit and Russia’s contract refusals
Metallurgical (coking) coal is experiencing an even more paradoxical situation. After the devastating cyclone in Australia earlier this year, the market expected a deficit, and prices for premium Australian coking coal in China indeed rose to $150–160 per tonne. It would seem that Russian exporters had a goldmine in their hands.
However, traders report that Russian companies are massively refusing to sign new export contracts. The reason is the explosive rise in sea freight costs due to military risks in the Strait of Hormuz, as well as the effective paralysis of commercial shipping in the Far East regions. As a result, even at high prices, exporters’ profits remain zero or negative.
Europe and Asia: temporary return to “dirty” energy
The economies most sensitive to the gas price spike have proven to be those capable of rapidly switching between energy sources.
- Japan and South Korea: Are increasing the load on their coal-fired power plants to save expensive LNG for industry and the residential sector. According to Guotai Haitan analysts, these two countries provided the bulk of the increase in coal demand in late April.
- Germany, Poland, the Czech Republic: If the gas crisis persists at €50–60 per MWh, they will be forced to take some coal-fired capacity out of mothballs. Prices at the Amsterdam-Rotterdam-Antwerp (ARA) port have already jumped to $125–130 per tonne – a high since mid-2024.
But the main paradox is that countries which, just five years ago, called coal “fossil fuel shame” are now burning it again in their furnaces. However, as long-term forecasts show, this is not a trend, but an agony.
China: the green turning point and the inevitable slowdown in demand
The world’s largest coal consumer, China, enters 2026 with a historic forecast. According to CITIC Securities, growth in coal consumption in the PRC this year will be a record low of 0.6%, and installed solar power capacity will for the first time ever equal coal-fired capacity, and may even overtake it by the end of the year. Every new solar field in the Gobi Desert is a knife in the back of the coal industry.
Global coal consumption has already reached its peak in 2024, and despite a temporary uptick, the downward trajectory is irreversible. Even Goldman Sachs, known for its opportunistic forecasts, confirms that the energy crisis will accelerate the transition to renewables, not push the world back to the 19th century.
Expert opinions: unanimity in pessimism
Forecasts from leading global analysts are unanimous: the current price rise is local and temporary.
| Agency / Analyst | Forecast and key thesis |
| Goldman Sachs | The energy crisis will accelerate the transition to renewables; the rise in coal prices is temporary. |
| Fitch Ratings | Coking coal prices will begin to fall in Q2 – a correction is expected. |
| CITIC Securities | Coal consumption growth in China – 0.6% in 2026. The long-term trend is downward. |
| Guotai Haitan | The spike in demand in Japan and Korea is short-lived; fuel switching will not save coal. |
| NEFT Research | Russian export prices for thermal coal in Q2–Q4 2026: $69.6–82.3/t. Geopolitics has supported prices, but they will decline by year-end. |
The coal market is currently experiencing its “black swan”: the oil shock has given it a temporary reprieve, allowing it to profit from speculators and panic. But behind this smokescreen, the main story is invisible: the structural transition to renewables is advancing by leaps and bounds. China has already crossed the Rubicon; Europe and Japan are merely delaying the inevitable.
Russian exporters, who for years have relied on the “east-west pipeline”, are once again losing out: just when prices have risen, they cannot ship the product due to a freight collapse. The coal age is dying out faster than Greenpeace optimists ever imagined.
