War and Outcome of Talks Dictate the Energy Markets – Petcoke Back in Expensive Zone Towards Coal

Why It Matters

The shifting geopolitics directly affect global fuel pricing, influencing inflation, industrial costs, and investment decisions across energy‑intensive sectors.

Key Takeaways

• Cease‑fire eases oil price volatility but transport bottlenecks persist.
• Coal prices retreat, reviving demand as cheaper alternative to gas.
• Petcoke discounts narrow, pushing it back into the expensive zone.
• Russian oil sanctions easing may boost supply to India and global markets.
• Central‑bank rate concerns could dampen energy demand, risking stagflation.

Pulse Analysis

The early‑April cease‑fire between the United States and Iran has softened the sharp backwardation that once plagued Brent futures, but the underlying logistics nightmare remains. Blockades in the Strait of Hormuz and damaged refinery capacity mean that even with OPEC+ poised to increase output, physical oil flows will recover slowly. Analysts at Brannvoll ApS now forecast a Brent range of $55‑$125 for 2026, reflecting a $40 premium still tied to lingering conflict risk. Meanwhile, the broader macro‑environment—particularly central‑bank hawkishness—could suppress demand, adding another layer of uncertainty to price trajectories.

Coal markets have reacted more to speculative sentiment than to supply constraints. After peaking near $140 per tonne, coal fell 42.7% month‑over‑month, pulling the API2 3Q26 contract down to $114. The price drop repositions coal as a relatively cheap alternative to natural gas, whose TTF (Cal27) price sits around €37 (approximately $40) and has slipped 15% amid storage concerns. This shift may accelerate coal‑to‑gas substitution in power generation, especially in Europe where emissions regulations are tightening but cost pressures remain acute.

Petcoke, a niche but critical feedstock for cement and steel, has surged back into the expensive zone as supply tightens. The Port Arthur refinery incident removed a significant volume from the market, while freight rates to China and India stay high, limiting new demand. Discounts to API4 coal have collapsed to as low as 2% for the 4.5% sulfur contract, pushing FOB prices to $111 and CFR ARA to $140. Brannvoll projects petcoke to stay elevated through April before a rapid correction if Middle‑East tensions ease, a trajectory that could reshape cement cost structures in the second quarter of 2026.