Energy Crisis on the Horizon: Coal Prices Rebound, Up 2%
Energy crisis is looming: coal prices flare again, alongside the climbs in oil and gas prices and the threat of a global energy crisis.
Jakarta, CNBC Indonesia — Coal prices are once again on the boil, following the climbs in oil and gas prices and the threat of a global energy crisis.
The April coal contract settled at US$135.25 per tonne on Thursday (5 March 2026), up 1.7%. The uptick came as prices had fallen 3.7% on Wednesday.
Coal prices briefly surged to around US$138 per tonne on Tuesday, or the highest level since November 2024.
Coal prices surged again on Thursday after oil climbed and gas rose. WTI crude rose 8% on Thursday trading, while European gas rose 1%.
Coal is a substitute energy source for oil and gas, so prices influence one another.
The price surge was driven by an unusual halt to operations at Qatar’s LNG facilities, boosting demand for fuel switching in the power generation sector. The rise followed a drone attack by Iran on Qatar’s main LNG export hub, underscoring rising tensions in the Middle East.
That facility accounts for around 20% of global LNG supply and has never halted operations completely in its 30-year history.
With many Asian economies relying on LNG from Qatar, Taiwan has indicated it may increase coal-based power generation if supply disruptions persist.
Oil prices also rose after Israel’s attack on Iran heightened market concerns about energy supply disruption in the Middle East. Investors worry the conflict could widen and disrupt production and oil distribution routes in the region.
The Gulf region is a vital area for the global energy market. Militarised tension in the area often triggers oil price volatility as a large share of global oil exports originate there.
Market participants are most concerned about potential disruption in the Strait of Hormuz, a strategic sea lane that handles around 20% of the world’s oil supply. Even minor disruptions can trigger a spike in global oil prices.
In India, Coal India shares rose more than 4% on Thursday, following a sharp rally in global coal prices amid geopolitics in West Asia.
Strong premiums at electronic auctions and rising domestic demand could lift company profits. Analysts say that every INR 100 per tonne increase in realised e-auction prices could lift earnings per share (EPS) by around 2%.
Coal India’s stock rally came amid the global coal price surge linked to geopolitical tensions in West Asia.
European thermal coal reached its highest level since October 2023, while South Africa’s thermal coal reached its highest since August 2024.
Northwest Europe steam coal, a high-energy import for Europe, also rose 16% to US$133.18 per tonne, or up 26% in just one week.
Analysts note that energy supply disruptions, including Qatar’s LNG production curtailment following the drone interception near Ras Laffan, are expected to push switching from gas to coal consumption, thereby supporting global coal prices.
The Chinese coking coal market is also recovering. However, the recovery remains slow and lacks strong market confidence.
Price increases have been limited as demand remains constrained, particularly after coke plants asked producers to cut coke prices. This weighs on the sentiment of the steel-making coal market.
After the Lantern Festival on 3 March, most coal mines in China have returned to normal operation. However, weak demand from the steel and coke industries means mine coal sales have not fully recovered.
With shipments not keeping pace with production, inventories of coking coal at mines are rising. The condition indicates the market remains oversupplied relative to demand, so price gains are likely to be limited.
This phenomenon has occurred before when purchasing demand weakened and mine coal stocks climbed, signalling a languishing market.