Coal is emerging as an increasingly attractive alternative to oil for energy-starved countries across Asia, according to Stamatis Tsantanis, chief executive officer of Seanergy Maritime Holdings Corp.

“China has been restocking massive amounts of coal in recent months,” Tsantanis told Bloomberg Television in an interview on June 10. “Most importantly, coal is also becoming a strategic commodity for the United States.”

The effective closure of the Strait of Hormuz in early March has driven Asian buyers to look for alternative sources to replace disrupted Persian Gulf barrels. The U.S. has emerged as a supplier of last resort for some. China has slashed its oil imports while pivoting toward producing chemicals from raw materials like coal instead of oil, according to analysts. 

Tsantanis also warned of a massive energy need across parts of Asia if a strong El Niño further increases fuel demand and prices.

Capesize shipping operator Seanergy doesn’t have any vessels currently transporting oil or transiting the double-blockaded Strait of Hormuz, a waterway not directly along the main routes favored by the largest cargo ships carrying iron ore, coal, bauxite and more. 

But higher bunker fuel prices and longer shipping routes to avoid “problematic areas,” including the Red Sea, have boosted the cost of freight, Tsantanis said. 

Increased transport costs have implications far beyond just energy markets, he added. They risk driving up costs to move raw materials required for trillions of dollars’ worth of infrastructure, as well as global data center projects.