LONDON (Realist English). The global coal market is experiencing a true renaissance against the backdrop of the war in Iran and the effective blockade of the Strait of Hormuz. Countries in Asia and Europe, faced with a shortage of liquefied natural gas (LNG) from the Persian Gulf, are massively returning to coal‑fired generation.
Benchmark thermal coal prices at the port of Newcastle are firmly above $140 per tonne, hitting highs not seen since October 2024.
Price increases: from Australia to Europe
High‑calorie coal (6,000 kcal/kg) at Australia’s Newcastle port has exceeded $140 per tonne, gaining more than 30% since the start of the conflict on February 28. Spot prices for Russian coal with similar specifications in the Far East are holding near $87 per tonne.
The European benchmark API2 (delivery to Amsterdam, Rotterdam and Antwerp) has risen 13% since the start of the war, reaching $121 per tonne. The June 2026 delivery contract rose to $105 per tonne, while the December futures contract is already trading at $111.85, indicating expectations of a deficit in the second half of the year.
Export prices for Russian thermal coal in western ports have risen to $73–85 per tonne – analysts attribute this to a revival of the Turkish market and the lifting of ice restrictions in the Baltic. Indonesian 4,200 kcal/kg coal has gained 12% since the start of the war, trading at $57 per tonne.
Asia and Europe switch to coal
The energy shortage has forced many countries to reconsider their previous plans to phase out coal. Japan and South Korea, critically dependent on Middle Eastern LNG, are bringing reserve coal units back online. India, seeking to avoid blackouts during the summer heat, has ordered generating companies to maximise coal imports. China is increasing purchases of Russian coking coal (+9% in the first quarter). Bangladesh and Thailand are also accelerating their switch to solid fuel.
In Europe, against the backdrop of record gas prices and critically low stocks (30% below last year’s levels), Germany has halted the phase‑out of coal‑fired capacity, Italy has postponed the closure of thermal power plants until 2038, and Poland is running its units at maximum load.
Political scientist Alisa Kazelko stressed that the conflict has exposed a structural vulnerability: “Europe chose political instability over full‑scale economic collapse.” The head of the analytical centre BigMint warned that a sustained blockade could add 10–20 million tonnes of coal demand per quarter, potentially turning the market from surplus to deficit.
Forecasts: from $115 to $160
Fitch Solutions (BMI) has raised its 2026 average price forecast for Newcastle coal from $100 to $115 per tonne. Morgan Stanley expects prices to settle above $130 per tonne if the conflict drags on. Some analysts do not rule out an increase to $150–160 in the event of further escalation.
At the same time, experts at NeFT Research expect the Vostok 5500 index (Russian coal) to be in the range of $76–82 per tonne in 2026, falling to $74–81 by 2028. Alexander Balyuta, an expert at the Institute of Energy and Finance, believes that a return to profitability by the end of the year is unlikely, although losses may be reduced.
Russian Energy Minister Sergei Tsivilev has already warned that some unprofitable mines in Russia (primarily in Kuzbass) will either be taken over by larger players or liquidated.
While fighting rages in the Middle East, coal remains the main “fire brigade” reserve of global energy. However, once the geopolitical storm subsides, experts expect a return to the “green” agenda, and the smoking chimneys of power plants will again force politicians to talk about the climate.
