Coal Profits Surge Amid Iran Conflict, Boosting South Africa’s Exports to Australia
The ongoing conflict between the United States and Israel, and Iran has triggered significant disruptions in global energy supplies, but it has surprisingly led to an increase in coal consumption. Countries worldwide, primarily in Asia, have been compelled to rely on coal as a readily accessible alternative amid skyrocketing oil and gas prices. This shift, while a response to immediate energy needs, raises important questions about the future of global energy policies and the urgent need for cleaner alternatives.
In the wake of the US-Israel conflict with Iran, global energy supplies have faced unprecedented challenges, causing disruptions that have reverberated throughout the market. As countries grapple with soaring oil prices and restricted gas supplies, the reliance on coal has notably surged, presenting a surprising turn in the global energy landscape. In this context, South Africa’s Thungela Resources has emerged as a key player, announcing that it has doubled its half-year profits primarily due to heightened demand for coal.
While coal remains one of the most polluting fossil fuels, its abundance and relative affordability have made it a go-to energy source for many countries facing unprecedented energy crises. As nations such as Japan and South Korea have adjusted their energy strategies by reverting back to coal-powered electricity generation, the global outlook for coal consumption has shifted dramatically. Analysis by the energy data company Ember posits that global coal output could witness a remarkable rise of 1.8 percent by the end of 2026 compared to 2025, countering earlier expectations of a decline.
The closure of the Strait of Hormuz, following Iranian military actions, has severely disrupted oil and gas supplies, forcing many countries to turn to coal as a viable alternative. The Strait is crucial for energy transportation, with approximately 82 percent of oil and gas shipments in 2022 destined for Asian markets, including China, India, Japan, and South Korea. Countries in the Gulf region, pivotal in energy exports, have also faced significant challenges, with Iran’s military actions leading to critical damage to facilities in Qatar and the United Arab Emirates, disrupting their capacity to meet market demands.
Moreover, the uptick in coal usage is not confined to Asia alone; countries such as Germany and Italy are re-evaluating their commitments to phasing out coal, prioritizing energy security amidst the fallout from the conflict. Indonesia, a leading coal exporter, has scrapped previous plans to limit production, seeking to capitalize on rising prices that have increased to 1.85 per tonne this July.
As nations face the pressing energy demands of their populations, analysts are concerned about the long-term implications for environmental sustainability efforts. Many countries had pledged at the COP26 climate summit to reduce coal reliance, but the ongoing conflict has jeopardized these commitments. Countries with outdated energy infrastructures, such as Bangladesh, have shown a tendency to revert to coal usage when alternative energy supplies are disrupted, posing a challenge for the global transition toward cleaner energy sources.
Nevertheless, there is a silver lining. Some regions are witnessing a decline in coal consumption, particularly in Europe, as investment in renewables continues to rise. Moreover, the eventual breakdown of fossil fuel supply chains may enable a competitive shift towards clean energy alternatives in the future. Experts assert that Asian countries must expedite their transition to sustainable energy solutions to ensure energy security in the face of future global crises.
As nations navigate the complexities of energy demands and environmental accountability, the balance between immediate needs and long-term goals remains a critical focus for policymakers and industry leaders alike.
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