By Conor Bernstein
War in the Middle East has upended energy markets. With natural gas supply dramatically reduced with the closure of the Strait of Hormuz and natural gas prices soaring globally, the pivot to coal is underway.
Buyers from Europe to Asia are scrambling for natural gas substitutes. Rising prices for thermal coal — still a song compared to spiking natural gas prices — reflect the ongoing pivot.
With natural gas prices in Europe spiking, coal generation is winning the marketplace and serving as a price shock absorber on electricity grids that still have access to it.
The natural gas price crunch is even prompting some nations to bring back shuttered coal capacity, something that last happened in 2022 following Russia’s full-scale invasion of Ukraine. Italy has already made clear that should natural gas prices continue their rise, it will consider restarting mothballed coal plants to alleviate price pressure on consumers and the economy.
In Asia too, the pivot to coal is accelerating. According to the Financial Times, utilities in Japan, South Korea, Taiwan, Thailand and Bangladesh are turning to greater reliance on coal to reduce their exposure to the LNG market.
Bloomberg’s commodity columnist, Javier Blas, presciently observed in the early days of the conflict, following the closure of Qatar’s LNG production facilities, “Asian countries got a huge reminder today of the advantages of coal for baseload electricity.” He added that this shock will likely leave a lasting imprint on energy policy. There’s good reason to believe it already has.
A Safer Bet
Two energy shocks in four years are more than enough to do lasting damage to confidence in the security and reliability of global gas supply.
Gas had been on a tear. The global gas market grew by 60 percent between 2015 and 2024, and it expanded another 7% in 2025. LNG exporters have been banking on its continued growth. But there are going to be more than a few countries that decide greater dependence on LNG supply and the volatility of the gas market is a risk they can no longer justify. Conversely, China’s decision to double down on coal as an energy security and affordability hedge is looking wiser by the day.
The International Energy Agency has again and again had to punt on its predictions of peak coal demand. This energy crisis is likely to further extend coal’s runway. Global coal demand, which hit a new peak last year, is showing no signs of fading. In fact, there’s now ample reason to believe it’s going to rise, and the U.S. is well positioned to meet it.
U.S. producers have historically served as swing suppliers to global coal markets. When prices rise and markets tighten, U.S. suppliers can quickly bring product to the market to provide reliable fuel and manufacturing inputs to allies and trade partners. As the global pivot continues, and as energy security takes center stage, U.S. coal will undoubtedly have a critical role to play in meeting the needs of a rapidly reshuffling global energy marketplace.
Conor Bernstein is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.
Source: www.coalage.com
