Coal Profits Double Amid Global Chaos And Oil Shortages

Coal companies are printing money right now while the world burns through emergency reserves. Analysts insist the shift to clean energy is still alive, yet the numbers tell a different story for this week. South Africa's thermal coal giant, Thungela Resources, doubled its half-year profits as global chaos forced nations to dig up more dirt from the ground.

Oil and gas flows have been choked off by the US-Israel war on Iran. One specific sector is riding the wave without a care in the world – coal. This week, Thungela Resources announced it had doubled its half-year profits because the conflict has pushed countries toward this fuel.

The situation for people living through this crisis looks grim. Many Iranians face limited options as the war with the US tightens the economy around their necks. Elsewhere, a massive fire broke out at a fuel depot near Sulaimaniyah in Iraq. Meanwhile, officials in Brazil claim Amazon oil is a passport to the future, and China is scrambling to see if a new Arctic route can replace the Middle East chokepoints that are now clogged.

Coal itself is abundant and cheap to produce, but it remains one of the dirtiest fossil fuels on the planet. Mining it pollutes water sources, and burning it dumps enormous amounts of carbon into the atmosphere, fueling global warming right before our eyes. In recent months, several nations in Asia have reversed or delayed promises to cut back on coal production. Global coal consumption was already rising in 2025 as the Eurasia region and the US used the fuel to power artificial intelligence data centres, according to the World Bank.

So why is more coal being used? The war triggered a global energy crisis that forced countries to make hard choices. Strikes on Tehran began on February 28, which led Iran to close the Strait of Hormuz. About one-fifth of the world's oil and liquefied natural gas supplies were shipped through this waterway during peacetime. Negotiations to reopen the strait are ongoing, but supplies have already dropped and prices have soared. Many nations fell back on the most readily available alternative to keep the power on – coal.

While coal prices have climbed, the fuel is still much cheaper than oil and stays in stock more easily than gas that needs pipelines or tankers. No region has been hit harder 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 for these vital resources.

Beyond shipping blocks, Gulf countries caught up in the conflict have suffered direct hits from Iranian strikes. Qatar was forced to declare force majeure on its delivery contracts in March when Iranian drones hit its Ras Laffan oil facility. That site is the world's largest LNG complex and went offline instantly. Iran's attacks knocked out 17 percent of Qatar's LNG exports by March, state officials said. The United Arab Emirates faced similar devastation. Its Das Island LNG terminal, Fujairah oil terminal, Ruwais Refinery Complex, and other energy sites were attacked during the conflict.

Facilities in Saudi Arabia and Oman have also been hit by the fallout. The question remains where coal use is actually climbing. An analysis from the energy data company Ember offers a stark picture. Coal output will rise globally by 1.8 percent by the end of 2026 compared with 2025 if we face a "worst-case" scenario. Experts call this a notable uptick. Nations are supposed to be transitioning away from coal, yet production is creeping up anyway.

Since the war began, several Asian countries have announced plans to increase coal-fired electricity generation. Japan has lifted restrictions on older, high-emission coal plants to cope with energy shocks. South Korea has delayed shutting down coal-powered plants it promised to wind down by 2040. In Bangladesh, the government at first imposed power cuts, closed universities and rationed fuel sales for vehicles before announcing a shift to ramp up coal-powered electricity generation. Thailand, the Philippines and Vietnam have also increased coal-powered electricity generation to preserve dwindling gas reserves.

Pakistan faces its own numbers. Data from the National Electric Power Regulatory Authority showed that by July, electricity generated from imported coal had risen by 90 percent compared with the same period the previous year. China and India already consume 70 percent of the world's coal and are also major producers. In India, where electricity demand is increasing partly due to more intense heatwaves, the government plans to launch several new coal-mining projects that will see global supplies increase by 2.5 billion tonnes a year, according to the Global Energy Monitor. Germany also said it won't jeopardize electricity generation because of earlier climate promises it made while Italy has pushed back its coal phase-out plans from late 2025 to 2038.

Who is making a profit from this shift? Indonesia is the top coal exporter by a wide margin, followed by Australia and Russia. In March, Jakarta reversed previous plans to curb coal production and reduce oversupply in a bid to benefit from rising prices. Prices were set at $131.85 per tonne in July, compared with $102.20 in the previous year. South Africa's Thungela reported doubled profits from January to June compared with the same period of 2025. This surge was driven largely by higher production from its Ensham mines in Queensland as well as higher demand and higher prices at both Ensham and its South Africa operations.

Production at Ensham rose by 38 percent in the first half of the year during the peak of the conflict to 2.2 tonnes, compared with 1.6 tonnes in the previous period. The company reported 4.80 South African rand ($0.30) in headline earnings per share – or HEPS, a primary metric of profitability used in South Africa. That is up from 1.92 rand ($0.12) in June last year. In a statement, Thungela said prices will likely remain high as European and Asian markets prepare for winter.

What does this mean for the drive for clean energy? In 2021, more than 40 countries, including Indonesia and Vietnam, promised to scale back coal use at the COP26 global climate summit. India and China did not sign up, however. Last year, South Korea joined the Powering Past Coal Alliance, which helps coal-dependent economies transition away from the fuel. However, the Middle East crisis has upset those plans largely because many countries do not have sufficient renewable energy-generating capacity to fall back on, said Nick Hedley, an energy transition analyst at South Africa-based Zero Carbon Analytics.

For the likes of Bangladesh, it is easy to lift coal use when global gas supplies are disrupted because the country invested heavily in coal infrastructure in recent decades, and much of that capacity has been sitting idle. Coal becomes cheaper than imported gas when gas prices surge. Importantly, coal still cannot compete with renewables on cost, Hedley added. It is not all doom, however.

Experts say rising use of power in some regions is getting canceled out by steady drops in coal consumption elsewhere, especially across Europe.

China saw its own domestic coal output slide this year after officials stepped up rules following a fatal blast at the Liushenyu mine in May that killed 82 workers.

Beijing has poured money into renewable projects to replace the fading fuel.

Hedley added that breaking apart global fossil supply chains could push clean options forward and force nations to spend more on them.

"The lesson here is that Asian countries need to speed up their shift to clean energy and electrification to safeguard themselves against future global crises," he concluded.