The Iran war has disrupted global LNG supplies, cutting off around 20% of shipments through the Strait of Hormuz. Countries are returning to coal as a reliable alternative, with Taiwan restarting idled plants and South Korea boosting coal-generated electricity by more than a third last month. Italy has put its coal plants on standby in anticipation of prolonged energy shocks.

Spot coal prices at Australia's Newcastle port have jumped 12% since the conflict began, with the benchmark briefly surpassing $140 per metric ton in mid-March. This marks the highest level since late 2024, though still far below the $440 peak reached after Russia's invasion of Ukraine in 2022.

Energy experts view coal as a geopolitical hedge during this crisis. "Coal is a buffer fuel right now," said Tony Knutson of Wood Mackenzie. "It is independent of geopolitics relative to LNG." The return to coal represents another economic ripple effect from the Middle East conflict, potentially increasing global carbon emissions while addressing immediate energy security concerns.