South Africa to Australia: Why coal profits are surging during Iran war
Summary
The war between the United States, Israel, and Iran has disrupted global supplies of oil and natural gas. As a result, many countries—especially in Asia—are using more coal for electricity, causing coal profits to rise despite efforts to reduce its use.Key Facts
- The US-Israel conflict with Iran has caused oil and gas supplies to drop because Iran closed the Strait of Hormuz, a key shipping route.
- The closure of this route led to higher oil prices and shortages, pushing countries to rely more on coal.
- Although coal prices increased, coal is still cheaper and easier to get than oil.
- Asia receives about 82% of oil and gas shipments through the Strait of Hormuz; countries like China, India, Japan, and South Korea are most affected.
- Iran’s attacks have damaged major oil and gas facilities in Qatar, UAE, Saudi Arabia, and Oman, reducing their exports.
- Several Asian countries have delayed closing coal power plants or increased coal use to ensure electricity supply during the crisis.
- Global coal production is expected to increase by 1.8% in 2026 compared to 2025, going against climate goals.
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