South Africa to Australia: Why coal profits are surging during Iran war

Crude oil and natural gas supplies have been disrupted worldwide by the United States-Israel war on Iran, but one energy sector appears to be cashing in – coal. This week, South Africa’s thermal coal producer Thungela Resources said it had doubled its half-year profits as the war has forced more countries to buy the fuel. Although abundant and relatively cheap to produce, coal is considered one of the dirtiest fossil fuels.

Mining it causes water pollution, and burning it releases enormous amounts of carbon into the atmosphere, which contributes to global warming. In recent months, several countries, especially in Asia, have reversed or delayed promises to scale back on coal production. Global coal consumption was already rising in 2025 with the Eurasia region and the US using the fuel to power artificial intelligence data centres, according to the World Bank.

The US-Israel war on Iran has triggered a global energy crisis. Soon after strikes on Tehran began on February 28, Iran closed the Strait of Hormuz, through which about one-fifth of the world’s oil and liquefied natural gas (LNG) supplies were shipped during peacetime. Negotiations to reopen the strait are ongoing.

Its closure has reduced oil and gas supplies and caused oil prices to soar, prompting many countries to fall back on the most readily available alternative to keep the power on – coal. While coal prices have also risen, the fuel is still much cheaper than oil – and is more readily available. No region has been more impacted than Asia, which largely depends on the Gulf for its energy needs.

About 82 percent of oil and gas shipments through the Strait of Hormuz went to Asia in 2022, according to the US Energy Information Administration. China, India, Japan and South Korea were the top destinations. Besides being unable to ship exports through the strait, Gulf countries caught up in the conflict have also been badly impacted by Iranian strikes.

Qatar, for example, was forced to declare force majeure on its delivery contracts in March when Iranian drones hit its Ras Laffan oil facility – the world’s largest LNG complex – forcing it offline. Iran’s attacks had knocked out 17 percent of Qatar’s LNG exports by March, state officials said. Similarly, the United Arab Emirates’s Das Island LNG terminal, Fujairah oil terminal, Ruwais Refinery Complex and other energy sites have been attacked during the conflict.