Coal's Brief Resurgence Amid Global Energy Shifts

The recent geopolitical tensions, notably Iran's conflict affecting energy routes, led to a temporary spike in coal prices. However, this does not signal a long-term comeback. While coal usage saw a brief increase due to policy support and rising natural gas prices, its structural decline remains evident amid shifts to renewable energies.

The global coal market witnessed a sudden spike in prices following Iran's conflict, which closed the Strait of Hormuz and drove up prices by over 25%. However, experts caution that this is not a resurgence but rather a temporary market fluctuation.

Despite the brief increase in coal consumption spurred by U.S. policies and increase in natural gas prices in 2025, long-term forecasts remain grim. The coal industry has witnessed significant bankruptcies due to its declining economic viability and environmental pressures.

While institutional capital has re-entered the coal market recently, long-term performance is hampered by environmental and litigation risks. The structural decline of coal is expected to continue unless significant profitability improvements are made.