Finance
Iron Ore Miners Could Face Billions More in Fuel Costs Due to Iran War, Fortescue Says
Published by Global Banking & Finance Review®
Posted on March 23, 2026
3 min readLast updated: March 23, 2026
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Fortescue warns that rising diesel prices—driven by the Iran war and Strait of Hormuz disruptions—could add billions in fuel costs to iron ore miners, though its aggressive decarbonization and electrification efforts could yield hundreds of millions in savings.
Iron ore miners could face billions more in fuel costs due to Iran war, Fortescue says
By Amy Lv and Lewis Jackson
Impact of Iran War on Iron Ore Miners' Fuel Costs
BEIJING, March 23 (Reuters) - Iron ore miners are at risk of incurring billions of dollars more in fuel costs if diesel prices continue to rise, a senior executive at Australia's Fortescue said on Monday.
Rising Diesel Prices Amid Geopolitical Tensions
The U.S.-Israeli war on Iran has all but stopped shipments through the Strait of Hormuz, sending oil and gas prices higher and tightening the supply of diesel, a main transport fuel for the mining sector.
Benchmark Singapore diesel swaps were trading at slightly more than $180 a barrel on Monday, up from $92.5 a barrel before the war broke out, LSEG data showed.
Financial Impact on Fortescue and Competitors
"A 10-cent change in the price of diesel impacts us by $70 million," said Dino Otranto, metals and operations chief executive officer at global miner Fortescue, in an interview on Monday. "If you look at our competitors, the top four, every 10-cent movement has a half a billion U.S. dollar impact on the cost structure."
The company gets most of its fuel from Southeast Asia, but was "comfortable" with current fuel stocks, he said, as long as the war in Iran does not escalate.
Decarbonization Efforts and Cost Savings
The world's fourth-largest iron ore supplier has set some of the most ambitious decarbonization targets among Australia's major miners, which Otranto said had helped it save fuel costs.
Electrification and Renewable Energy Initiatives
He said Fortescue would save at least $100 million over the next 12 months on diesel costs from its push to electrify operations with renewable energy. The company planned to cut consumption by 1 billion liters of diesel equivalent over the next few years.
Shareholder Response to Decarbonization
"We announced a very aggressive decarbonization agenda some years ago," he said.
"For a number of years, that plan has been met with a lot of criticism, but now the tides are shifting ... now our shareholders say, you need to do this faster," said Otranto.
Fortescue's Engagement with China
Fortescue is in conversation with China's state iron ore buyer China Mineral Resources Group, said Otranto, who described the talks as dynamic and not confrontational.
Supply Negotiations
He declined to comment on negotiations about supply terms for this year.
(Reporting by Amy Lv, Lewis Jackson and Trixie Yap; Additional reporting by Melanie Burton and Helen Clark; Editing by Thomas Derpinghaus)
Key Takeaways
- •The 2026 Iran war, including halted shipping through the Strait of Hormuz, has sharply pushed diesel-linked costs higher for iron ore mining operations—Fortescue faces a US$70 million cost impact per US$0.10 diesel rise, with top four miners seeing ~US$500 million effects each.
- •Fortescue’s decarbonization strategy—including electrifying operations, deploying renewable energy, and replacing diesel equipment—is projected to save over US$300–400 million annually in fuel costs and displace hundreds of millions of liters of diesel.
- •The global energy shock from the 2026 Strait of Hormuz crisis has seen oil and diesel prices surpass US$100–126 a barrel, marking one of the largest supply disruptions since the 1970s and underscoring the urgency of energy resilience.
Frequently Asked Questions about Iron ore miners could face billions more in fuel costs due to Iran war, Fortescue says
1How is the Iran war affecting iron ore miners' fuel costs?
The U.S.-Israeli war on Iran has disrupted shipments through the Strait of Hormuz, causing oil and diesel prices to rise, increasing fuel costs for iron ore miners.
2What impact does a 10-cent rise in diesel prices have on Fortescue?
A 10-cent increase in diesel prices impacts Fortescue by $70 million, while the top four miners could see a $500 million increase in costs.
3How is Fortescue addressing rising fuel costs?
Fortescue is working towards electrifying operations with renewable energy, aiming to save at least $100 million in diesel costs over 12 months.
4Where does Fortescue source its diesel, and are supplies secure?
Fortescue sources most of its fuel from Southeast Asia and is currently comfortable with its stock as long as the Iran conflict does not escalate.
5What is Fortescue's stance on decarbonization?
Fortescue has set aggressive decarbonization targets, aiming to cut 1 billion liters of diesel equivalent and shift to renewable energy.
