March 3, 2026 - The conflict in Iran has upended the global market for oil and natural gas. It is also having a big impact on coal markets, even though coal isn’t in the direct line of fire.

Coal prices measured in the Rotterdam market were up about 13% on Monday to $119.50 per ton, a 52-week high. Coal stocks also rose, with Peabody Energy up 6.6% and Core Natural Resources  up 6.3%.

Coal is benefiting precisely because it isn’t directly affected in this conflict—unlike the other resources it competes against. Coal and natural gas are substitutes in electricity generation. When natural-gas prices get too expensive or natural gas supplies are threatened, utilities often turn to coal instead.

Natural gas markets have been severely curtailed by the conflict in Iran. Qatar, which ships about 20% of global liquefied natural gas, or LNG, had to shut down production after facilities were attacked. And ships full of LNG are currently blocked from traversing the Strait of Hormuz, the waterway from the Persian Gulf that allows Middle Eastern exporters to get their products to Asia.

Both Asia and Europe rely heavily on Middle Eastern LNG supplies, but Asia is particularly dependent on them. Pakistan, for instance, gets nearly 100% of its LNG from Qatar, according to Rystad Energy. Bangladesh and India also get the majority of their LNG from the Middle East.

Those countries are likely to substitute coal for natural gas in their power plants as the war causes costs to soar, said James Stevenson, an analyst at OPIS, a Dow Jones company, who covers coal. One of coal’s benefits is that it can be stored on the site of a power plant in enough quantities to last for weeks or even months.

“Coal obviously has a severe pollution issue,” Stevenson said. “But it has some very strong advantages over other fuels—reliability is probably the single biggest one. You don’t need it to be sunny or windy. Your fuel is right there. Arguably only nuclear is more reliable in a supply chain sense.”

In the longer term, countries may take this lesson to heart, avoiding more politically sensitive energy sources such as natural gas, which must be transported by pipeline or ship and can’t be stored as easily, Stevenson said.

That could include coal, though countries such as Europe almost certainly won’t build new coal plants, Stevenson said. The turmoil could also prove to be a growth driver for nuclear power and renewables, which don’t need fuel at all.