Europe turns back to coal amid energy crunch

Eighty countries on Thursday called for the full restoration of maritime navigation in the Gulf, as the conflict involving Iran continued to disrupt energy markets, push up fuel prices and encourage European power producers to turn back towards coal.

"We call for the full restoration of navigational rights and principles without delay," Bahrain's Foreign Minister Abdullatif bin Rashid al-Zayani said while reading a joint statement to journalists at the United Nations.

The appeal came as three Iran-linked oil tankers seized by the United States and carrying nearly six million barrels of Iranian crude were tracked crossing the Atlantic towards the United States. The cargo is valued at nearly $600 million.

The vessels were seized after Washington imposed a blockade of Iranian ports in response to Tehran's closure of the Strait of Hormuz. The closure of the Strait –the passage for one-fifth of global oil supplies – has rippled throughout the World.

Europe's electricity sector is particularly affected. Soaring gas prices, driven partly by reduced liquefied natural gas shipments through Hormuz, have made coal and lignite plants more profitable than gas-fired power stations for the first time since at least 2024.

European benchmark gas prices climbed above €80 per megawatt hour this month, their highest level in three years. Analysts expect coal-fired power generation to rise by about 25% over the next six months as gas-fired generation declines by a similar amount.

The energy shock has also pushed European diesel prices to records. The EU average reached €2.23 per litre, up from €2.16 the previous week, with 19 member states recording new highs. The United States supplied about half of EU diesel imports in August.

The European Commission warned that a possible US ban on diesel exports would harm both sides. Brussels said the measure was a "bad idea", particularly as Europe remains heavily dependent on imported fuel amid continuing global supply disruptions.