Iran Conflict Spurs Oil Spike, Coal Profits in Asia

Global energy markets are shifting dramatically as the US and Israel wage war on Iran, with coal producers in countries like South Africa and Australia reporting sharp profit increases even as the conflict disrupts oil and gas supplies worldwide. Thungela Resources, a major South African thermal coal company, announced this week that its half-year profits have doubled amid heightened demand triggered by the fighting that began with strikes on Tehran on February 28.

The closure of the Strait of Hormuz by Iran, a vital chokepoint for roughly one-fifth of global oil trade, has sent countries scrambling for alternative fuels. Coal, long criticized as one of the dirtiest energy sources due to its role in water pollution and massive carbon emissions, is filling the gap for nations in Asia and elsewhere. Several governments have already reversed or delayed pledges to reduce coal use, reversing years of gradual progress toward cleaner energy.

This surge comes at a time when global coal consumption was already climbing in 2025. The World Bank has linked rising demand to power needs in the Eurasia region and the United States, where artificial intelligence data centers require vast amounts of electricity. The war has accelerated this trend, turning what might have been temporary adjustments into sustained reliance on a fuel that accelerates climate change.

Environmental groups have condemned the developments, noting that mining operations continue to contaminate local water sources while burning coal releases enormous volumes of greenhouse gases. In South Africa, activists from Extinction Rebellion recently protested outside a major mining conference in Cape Town, highlighting the role of government officials in promoting the industry. Similar dynamics are playing out in Australia, where export-oriented coal operations stand to gain from the same market pressures.

The conflict's fallout extends beyond immediate energy shortages. Analysts point out that the war has exposed vulnerabilities in global supply chains, pushing even reluctant buyers toward coal despite its long-term costs. Countries that once committed to phasing out the fuel under international climate agreements are now prioritizing short-term stability. This reversal risks locking in higher emissions for years to come, undermining efforts to limit global temperature rises.

Critics argue that the US and Israeli actions have not only destabilized the Middle East but also handed windfalls to fossil fuel companies far from the battlefield. South African officials have defended the increased production as necessary for economic reasons, yet local communities near mines face ongoing health and environmental burdens. The pattern echoes past energy crises where conflicts in oil-rich regions boosted dirtier alternatives without addressing root causes of dependence.

As fighting continues, the coal boom shows no immediate signs of slowing. Industry reports suggest further profit growth if disruptions persist, while renewable energy advocates warn that the window for meaningful climate action is narrowing. The war's economic ripples are thus reshaping energy policies in unexpected ways, favoring established polluters over transitions that could reduce future risks.