In our weekly Energies Briefing to our clients on February 20, 2026, we noted that, “…it would seem that war is imminent, with [US President Donald] Trump threatening ‘really bad things’ by the first week of March. Oil markets are already primed for war but are also pricing in some sort of stale-mate, where each side walks away with bruised egos, but essentially the status quo remains”.

As the war is now deeply into its third week, we need to revise that to only one side (the US) walking away, while trying to claim some sort of victory, while Israel and Iran will fight to the bitter end. The shockwave that rippled through energy markets after February 28 saw crude up slightly, but natural gas and coal markets soaring through the roof. It was clear to everyone that Qatar Energy would declare force majeure and that happened within the first few days. The shock has also rippled through fuels, chemicals, fertilizer, copper (which needs sulphur), food, and a host of other commodities.

Then Trump uttered some calming words and crude sold off for a bit, creating the much needed 50% retracement, with crude again resurgent and likely to hit $150/bbl fairly soon. Note that the physical expiry for the April West Texas Intermediate crude contract is March 20 and I expect fireworks around that time. 

The conflict has disrupted roughly 20% of global crude oil and natural gas supply, with Iranian attacks damaging Gulf facilities and the loss of insurance and appetite effectively closing the Strait of Hormuz to all shipping, other than allies such as Russia and China. The Gulf is rapidly approaching full storage capacity and must then start shuttering its wells. This would be a disaster, with many wells unlikely to ever come back to full production. What is even more pressing, is that the Gulf needs food and humanitarian supplies to come in quickly.

For coal, this geopolitical crisis has proven a stark reminder of its relative security. Unlike oil and gas, most high CV coal originates from stable, proven exporters: the US, Australia, Canada and South Africa. Coal can be stored reliably for extended periods, offering a buffer against sudden disruptions. The war has reinforced coal’s role as a secure baseload option, as buyers scramble for alternatives to volatile hydrocarbons.

South African coal stands to benefit significantly. Richards Bay Coal Terminal  exports, dominated by high-CV thermal grades, have rallied significantly alongside the chaos, with RB1 soaring from $99/mt pre-invasion to around $117/mt at the time of writing. But gas-to-coal switching is not just happening in Europe, where ARA terminal stocks were already low and LNG tightness already persisted. 

SE Asian interest is also pouring in, as buyers pivot from recently limited Indonesian supply, although Russian coal (like with crude oil) offers a slight pressure release valve. India, a key South African market, faces complex dynamics but remains a strong driver. Despite high domestic production and moderating imports, power generation has stayed robust, and the war’s gas squeeze is also accelerating thermal coal imports. 

Buyers in Asia, including India, are increasingly favouring safer suppliers like South Africa and Australia over riskier origins. South African producers can meanwhile hold firm on pricing while capturing displaced market share, particularly from Russian exports curtailed by sanctions and infrastructure woes. Transnet’s ongoing challenges on the coal line persist, frustrating hopes for privatisation-driven efficiencies. However, recent improvements aim to lift capacity back toward 77-million tonnes yearly. 

This infrastructure support will (finally) prove timely if the demand sustains, which we think it will now. Looking toward year-end, the downstream effects hinge on conflict duration, but a lot of the physical and psychological damage has already been done. Higher inflation and energy costs are likely for the remainder of 2026, while many politicians and buyers are softening on their climate agendas. In that regard, higher CO2 levels are not necessarily bad. What is bad however, is the rate of release of CO2, with Earth’s climate systems unable to adapt quickly enough to a human-level timescale.

European utilities are likely to reactivate dormant coal capacity if gas inventories tighten further. Asian nations are eyeing China’s pragmatic approach in its latest five-year plan, which focuses on carbon intensity reductions rather than absolute emissions cuts. This will see coal plateau into 2030 without a firm peak, and is likely to delay plant retirements, with even more potential new builds.

At the same time, global supply tightness from Indonesian quotas, Australian weather risks, and Russian financial woes already points to a persistent structural short. Add the fact that a significant amount of Tier-1 South African coal production is coming to an end in the next five to ten years, and you have all the conditions for a massive global coal shortage.

For South Africa, the upside lies in export premiums, but domestic vulnerabilities also remain. Higher oil prices weaken the Rand, inflate fuel and food costs, and pressure inflation, delaying rate cuts and annoying the stock market. Yet coal’s rally can also help offset current account strain through stronger export earnings. Coal’s resilience always shines in difficult times, and these are indeed going to be difficult times. As the times and the tide recedes, the market will no doubt reveal even more global vulnerabilities, but South African coal appears well-positioned to ride the wave, locking in longer-term gains if/when the crisis persists into 2027.

By Bevan Jones, an ex-commodities broker, trader and resources consultant. He lives now as an off-grid homesteader while offering commodity-market strategies to clients at www.africansource.co.za

 The war has reinforced coal’s role as a secure baseload option, as buyers scramble for alternatives to volatile hydrocarbons