Why Coal Profits Are Surging During the Iran War
South Africa's Thungela Resources, one of Africa's largest thermal coal producers, reported doubling its half-year profits as the US-Israel war on Iran has pushed more countries toward coal for power generation. The company pointed to surging demand driven by the conflict's disruption of Gulf oil and gas supplies as the main reason for the earnings jump (Al Jazeera).
The turnaround is dramatic. In its 2025 annual results published on 23 March 2026, Thungela reported a 17 percent year-on-year decline in group revenue to R29.6 billion, caused by weaker benchmark coal prices and unfavorable foreign exchange movements. The company also took a non-cash impairment loss of R8.8 billion against its assets — an accounting write-down reflecting that those assets were worth less than their book value (Thungela Resources). By mid-2026, the picture had reversed: the Richards Bay Benchmark coal price averaged USD104.25 per tonne for the year to date, having strengthened versus the prior period, according to Thungela's CFO pre-close statement (Thungela Resources).
The war began with US-Israeli strikes on Tehran on 28 February 2026, setting off a global energy crisis. Iran responded by closing the Strait of Hormuz, the narrow waterway through which roughly one-fifth of the world's oil and liquefied natural gas (LNG) supplies were shipped during peacetime. The closure choked off oil and gas flows, sent prices soaring, and pushed many countries back to coal as the most readily available alternative fuel (Al Jazeera).
The damage to Gulf energy infrastructure went well beyond the strait closure. Qatar declared force majeure — a legal clause freeing parties from their obligations when extraordinary events make performance impossible — on its delivery contracts in March 2026 after Iranian drones struck the Ras Laffan oil facility, the world's largest LNG complex, forcing it offline. Qatari state officials reported that Iran's attacks had knocked out 17 percent of the country's LNG exports by that point. The United Arab Emirates' Das Island LNG terminal, Fujairah oil terminal, and Ruwais Refinery Complex were also attacked, along with energy facilities in Saudi Arabia and Oman (Al Jazeera).
Asian importers bore the brunt of the Gulf hydrocarbon disruption. According to the US Energy Information Administration, about 82 percent of oil and gas shipments through the Strait of Hormuz went to Asia in 2022, with China, India, Japan, and South Korea as the top destinations. Since the war began, Japan has lifted restrictions on older, high-emission coal plants and South Korea has delayed the shutdown of coal-powered plants to cope with energy shocks. An analysis by the energy data company Ember projected that global coal output will rise by 1.8 percent by the end of 2026 compared with 2025 in a worst-case scenario (Al Jazeera).
The coal demand surge was building on an existing trend. Global coal consumption was already rising in 2025, with the Eurasia region and the United States using the fuel to power artificial intelligence data centres, according to the World Bank (Al Jazeera).
The windfall has not been confined to coal producers. Eight of the biggest oil companies amassed combined profits of more than $90 billion (£67 billion) in just three months as the conflict sent energy prices soaring (The Guardian). Saudi Aramco reported a 33 percent increase in profit during the Iran war, earning $33.4 billion in adjusted net income (New York Times). Reuters reported that European energy companies' profits were expected to roughly double year-on-year for the second quarter of 2026, based on earnings growth estimates for the STOXX 600 energy index (Reuters). JP Morgan's trading arm made a record $11.6 billion in revenue in the first three months of 2026, helping the bank to its second-biggest ever profit (BBC).
Analysts had flagged the trajectory early. By late March 2026, Big Oil companies were identified as set to reap billions in windfall profits after a month of soaring energy prices, with analysts revising profit estimates upward (Reuters. The conflict had cost companies around the world at least $25 billion as of May 2026, with the bill still climbing (Reuters).
The broader context here is a conflict-driven reallocation of global energy flows with no clear endpoint. The Strait of Hormuz closure and the physical destruction of LNG and oil infrastructure across the Gulf have created a supply shock that fossil fuel producers outside the conflict zone are positioning to capture. Thungela's profit doubling, Aramco's $33.4 billion in adjusted net income, and the projected doubling of European energy sector earnings all trace back to the same mechanism: constrained hydrocarbon supply from the Gulf redirecting demand toward alternative producers and fuel sources. The coal revival in particular carries implications for climate policy, as major Asian economies reverse or delay decarbonization timelines they had committed to before the war. Whether these reversions are temporary wartime measures or become entrenched will depend on the duration of the conflict and the pace at which Gulf energy infrastructure can be restored.
