SINGAPORE (Realist English). The war between the United States and Israel against Iran, which led to the effective blockade of the Strait of Hormuz and the destruction of key gas liquefaction facilities in Qatar, has triggered the largest shift in global energy markets in decades. With natural gas supplies from the Persian Gulf under threat, countries in Asia and Europe are turning en masse to coal — the dirtiest but most accessible fuel.
Price surge: from $116 to $145 per tonne
As of mid‑April 2026, benchmark thermal coal (Newcastle) futures on ICE exceeded $140 per tonne, hitting highs not seen since October 2024. Since the start of hostilities on February 28, prices have risen more than 20%, and at some points reached $142–145 per tonne. The European benchmark API2 has risen 13% since the start of the conflict to $121/t, while the South African API4 is up 10% to $110/t. Indonesian 4200 kcal/kg coal has gained 12% since the start of the war and is trading at $57/t.
Experts expect further increases. Fitch Solutions (BMI) has raised its 2026 average price forecast for Newcastle coal from $100 to $115 per tonne, while Morgan Stanley warns that if the conflict persists, prices could stabilise above $130/t.
Asia: gas shortages push coal
Asia, especially Northeast Asia, is at the epicentre of the crisis. Qatari LNG, which covered up to 60% of South Asia’s needs and about 15% of Northeast Asia’s needs, has all but disappeared from the market after strikes on the Ras Laffan plants.
India, which imports about 85% of its oil and 50% of its gas, has already faced gas suppliers pulling out of summer tenders. The government has ordered all thermal power plants to run at full capacity and is ready to use coal reserves. Coal stocks at power plants stand at 55 million tonnes (24 days’ worth), with another 170 million tonnes at mine sites. Coal India is ramping up production, but at the same time faces a 26% increase in explosives costs and a 43% increase in ammonium nitrate due to higher logistics costs.
Japan, where almost 80% of coal is imported from Australia and Indonesia, has decided to expand its use of coal‑fired generation for one year, lifting capacity restrictions on plants to reduce LNG consumption (by an estimated 500,000 tonnes per year).
South Korea has lifted its seasonal cap of 80% on coal‑fired plant utilisation and increased its nuclear plant utilisation rate to 80%. According to Wood Mackenzie, this allows Seoul to completely replace all gas imports from the Persian Gulf before summer arrives.
Thailand has restarted mothballed coal units and cut fuel subsidies, passing on higher prices to consumers.
Bangladesh, whose new government is seeking $2 billion to buy fuel, is switching gas‑fired generation to coal at maximum speed.
Europe: abandoning the green agenda because of expensive gas
In Europe, gas prices (TTF) have exceeded €54 per MWh, crossing the €50 threshold at which coal‑fired generation becomes economically viable. The London exchange estimates that coal‑fired electricity generation could rise 20% year‑on‑year this summer.
Germany is officially considering extending the life of its mothballed coal units and restarting them.
Italy, which previously planned to phase out coal by 2025, has now pushed that deadline back to 2038 and is reviewing the operating conditions of its remaining capacity.
According to expert estimates, European imports of thermal coal could reach about 30 million tonnes in 2026 — a sharp reversal after a multi‑year downward trend.
Windfall profits and taxes
Major coal companies are reporting record results. Australia’s New Hope Corp (owner of the Bengalla mine) reported EBITDA of $215 million for the half‑year, with an average realised coal price of $139 per tonne.
The environmental organisation 350.org has already called for a “windfall tax” on coal companies worldwide. “The war in Iran exposes the deadly consequences of global dependence on fossil fuels. Coal producers are making huge profits while governments delay the transition to clean energy,” said the organisation’s executive director, Anne Jellema.
Production: exporters ramp up, importers increase own output
The global coal industry has responded asymmetrically: exporters are increasing supplies, while traditional giant importers are trying to replace lost volumes with their own coal.
Indonesia, the world’s largest coal exporter (about half of global supply), has raised production quotas for miners to take advantage of the situation. At the same time, the country has imposed export duties and a domestic market obligation (DMO), which could lead to shortages on the world market and further price rises.
Australia is increasing exports (up 9% month‑on‑month in March), but due to weather‑damaged logistics chains, physical shipments of coking coal fell 2% year‑on‑year in the first quarter.
Russia has also benefited: according to CREA, in the first two weeks of March, the country earned €513 million per day from oil, gas and coal sales — 8% more than in February. Coal exports alone brought the treasury hundreds of millions of euros in additional revenue.
China, despite attempts to slow growth, is increasing domestic production. In March, raw coal output was 440 million tonnes (0% year‑on‑year), and for the quarter — 1.2 billion tonnes (+0.1%). However, industry associations forecast record‑low production growth in 2026 (just +0.7%, to 4.86 billion tonnes), the slowest rate in a decade, due to market saturation and falling profitability.
China cut imports of Russian coal by 14.3% in January‑February 2026, preferring cheaper suppliers from Indonesia and Australia.
In the first week of April, prices for Russian coal in western ports rose 4.2–9.8% (to $135 per tonne) amid the energy chaos in the Middle East.
