Coal prices remain out of control. Since the Russian army invaded Ukraine, coal prices have skyrocketed. The benchmark Newcastle coal futures have risen 101% since the beginning of February and over 65% in the last 7 days. At the moment the price is at a new high of $435.00 per ton.
Uncertainty in the global energy market due to the sanctions imposed on Russia by the U.S. and Europe are causing concern for energy supplies to Europe. Europe is highly dependent on coal, crude oil, and natural gas from Russia. If the sanctions lead to a situation where Russia’s energy exports to the world market are restricted, the lights could soon go out in Europe.
According to the IEA, the energy mix in Europe consists of about 15% coal and over 20% gas and other fuels, most of which are imported from Russia. In Europe, however, it is assumed that Russia will fulfill its supply obligations despite the sanctions.
The German Minister of Economics, Robert Habeck, recently spoke out on this issue,
“If Russia deliberately interrupts these supplies, then of course the decision is made – then these will never be rebuilt. I think the Kremlin knows that too, Putin knows that too.”
In addition to rising coal prices, oil prices have also risen above the $100 per barrel mark for the first time since the financial crisis.
Brent crude has already risen by 16.6% this week and is currently at $113.77 per barrel.
WTI, on the other hand, has risen almost 17% to $112.01 per barrel.