West Asia tensions: Coal prices up by 15% in three days

The attacks carried out by Israel and the United States on Iran, followed by retaliatory strikes, have triggered sharp volatility in global markets. The impact of this geopolitical tension is being directly felt on energy and raw material prices.

What has come as a surprise, however, is that despite there being no direct link between India’s coal imports and the ongoing West Asia conflict, coal prices have been raised by an average of nearly 15% over the past three days. This sudden increase has created an atmosphere of concern among dyeing and printing unit owners in Surat.

Following the joint attack on Iran by the United States and Israel, Iran reportedly launched retaliatory strikes targeting American base camps located in parts of the West Asia, including the UAE, Saudi Arabia and Bahrain.

Iran has also issued warnings to vessels using the Strait of Hormuz, which connects the Persian Gulf with the Arabian Sea, and has carried out drone attacks. This has had a direct bearing on global markets. Amid such developments, the dyeing and printing industry in Surat is witnessing a serious impact.

Jitendra Vakharia, president of the South Gujarat Textile Processors Association, said that due to the war-like situation in the Middle East, coal prices have been increased by an average of 15% in the last three days. 

He pointed out that the coal imported into India mainly comes from Indonesia and, thereafter, from Australia. Coal supplies from these countries have no direct connection with the Middle East conflict. Despite this, suppliers and exporters have raised prices and have also increased shipping charges.

As a result, industrialists are facing an additional financial burden running into thousands of rupees every day. Given the uncertainty over how long the conflict will continue, there are fears within the industry that coal prices may rise further in the coming days.

India’s coal production recorded a robust 18.51% increase in February this year compared with the same month of the previous year, with the output of captive and commercial coal mines going up to 20.49 million tonnes (MT), while dispatches reached 17.72 MT, according to an official statement issued on Monday. 

For the financial year 2025–26 up to February, cumulative coal production from these mines registered a growth of 11.58% year-on-year, while cumulative dispatches recorded a 6.78% increase over the corresponding period of the previous year.