Assessing Glencore's Position Amidst a Simmering Energy Crisis

Glencore's trading division could see major gains from energy market turmoil after the 2026 Iran conflict, with thermal coal driving up to half of a potential 21% earnings increase.

The closure of the Strait of Hormuz following the 2026 Iran conflict has sent shockwaves through global energy markets. In this volatile landscape, the multinational commodity giant Glencore is increasingly viewed as a potential structural beneficiary. Analysis from Bloomberg Intelligence suggests the company's earnings could see a boost of up to 21%, with thermal coal accounting for nearly half of this projected increase. The firm's substantial trading division is expected to amplify these potential gains further.

A Trading Powerhouse in Turbulent Times

The strategic importance of the Strait of Hormuz cannot be overstated; it serves as a critical passage for approximately 25% of seaborne oil and 20% of globally traded LNG. The resulting geographical dislocations and price distortions create an ideal environment for Glencore's marketing operations. The company's extensive global logistics network allows it to reroute energy cargoes, while its trading desks are positioned to capitalize on arbitrage opportunities arising from diverging prices for coal, oil, and natural gas.

This scenario evokes clear parallels to the market dynamics of 2022, when Glencore's marketing earnings effectively doubled compared to normalized levels. Market experts now consider it a distinct possibility that the company could exceed the upper limit of its long-term earnings guidance, which stands at $3.5 billion.

Furthermore, Glencore's starting position appears stronger now than in the recent past. The group returned to profitability in 2025, posting net income of $363 million—a notable recovery from a prior-year loss of $1.634 billion. Significantly, thermal coal prices, which had pressured industrial EBITDA in 2025, are now trending upward once more.

Reasons for Caution and Market Realities

Despite the optimistic framework, unqualified bullishness may be premature. Alon Olsha, an analyst at Bloomberg Intelligence, offers a pointed warning: "The conditions that drove the extraordinary coal rally in 2022 are largely absent." Several structural factors differ today: European coal capacity has declined since 2022, Northeast Asian utilities are locked into existing LNG contracts, and many Asian power systems already operate with high coal dependency—limiting the potential for a substantial additional demand surge.

Observers also note a curious disconnect in the coal market. While the Panamax freight rate and the Newcastle coal price have climbed, this has not yet triggered a corresponding increase in physical coal shipments. High-frequency vessel tracking data does not show a clear rise in actual export volumes, suggesting the price movement may be speculative or anticipatory in nature.

The equity market has already priced in a significant portion of this potential upside. Glencore shares have advanced approximately 90% over the past twelve months, trading just below their 52-week high. Whether the company's fundamental performance can justify this elevated valuation will depend heavily on two key variables: the duration of the Hormuz crisis and the translation of coal price signals into genuine market movement.