A conflict-driven energy crisis is boosting coal consumption worldwide, according to reports from mining companies and energy analysts. Following strikes on Tehran that began in late February, Iran closed the Strait of Hormuz, a critical shipping corridor for approximately one-fifth of global oil and liquefied natural gas supplies. The blockade has reduced energy availability and driven up prices for petroleum and gas, prompting nations to turn toward coal as a more affordable and readily accessible alternative for power generation.
Asia has been particularly affected by the disruption, as the region historically depended heavily on Gulf energy exports through the Hormuz Strait. In response, major economies including China, India, Japan and South Korea have adjusted energy policies to increase coal-based electricity generation. Japan has reactivated older coal plants, while South Korea has delayed planned shutdowns. Bangladesh, Thailand, the Philippines, Vietnam and Pakistan have similarly ramped up coal power to offset supply shortages. Indonesia, the world’s largest coal exporter, reversed earlier production-curbing measures in March to capitalize on rising prices, which reached $131.85 per tonne in July.
Thungela Resources, a South African thermal coal mining company, reported doubled profits in the first half of the year compared with the same period previously. The company’s Australian operations produced 2.2 million tonnes during the peak conflict period, up 38 percent from earlier production levels. Energy analysis firm Ember projects global coal output will rise 1.8 percent by year-end compared with 2025 levels under worst-case scenarios.
The surge represents a reversal of international climate pledges made at the 2021 COP26 summit, when more than 40 countries committed to scaling back coal consumption. Experts attribute the backsliding to insufficient renewable energy infrastructure in many nations, making coal the practical choice when traditional fuel supplies face disruption. Industry analysts note that while coal prices have increased, the fuel remains substantially cheaper than imported natural gas and continues expanding its market share during the energy crisis.
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