The ongoing United States-Israel war on Iran has severely disrupted global energy supplies, particularly following the closure of the Strait of Hormuz. In short, crucial maritime corridor through which roughly twenty percent of the world’s oil and liquefied natural gas passes. With regional energy infrastructure suffering heavy damage and natural gas prices spiking, nations worldwide, especially in Asia, are turning back to thermal coal to prevent severe power shortages. Consequently, global coal consumption is projected to rise by 1.8 percent by the end of 2026, prompting countries such as Japan, South Korea, Bangladesh, and Italy. In order to reactivate idle coal plants, expand coal-fired power generation, or delay promised phase-out targets.
This demand surge has generated significant profits for major coal-exporting nations and energy corporations. Indonesian exporters adjusted production upward to capitalize on rising market prices, while South African producer Thungela Resources reported a doubling of its half-year profits. Meanwhile, riven by higher prices and increased output at its operations in South Africa and Australia. Although this short-term reliance on coal temporarily undermines global climate promises made under COP26 and the Powering Past Coal Alliance. In addition, energy analysts emphasize that the global clean energy transition remains fundamentally intact. Long-term coal declines in Europe, combined with domestic production tightening in China, help balance this temporary spike.
In conclusion, while the Middle East conflict has forced many nations to temporarily fall back on dirty fossil fuels to secure immediate power needs. Obviously, in the resulting supply chain disruptions highlight the strategic risks of energy dependency. Ultimately, this volatility is expected to incentivize countries to accelerate their transition toward renewable energy infrastructure to protect against future geopolitical shocks.
Reference
Lawal, S. (2026, August 19). South Africa to Australia: Why coal profits are surging during Iran war. Al Jazeera. https://www.aljazeera.com/news/2026/8/19/south-africa-to-australia-why-coal-profits-are-surging-during-iran-war