U.S. miners are gearing up to boost exports as the Iran crisis roils energy markets, but rising production and transportation costs are hampering their ability to ship more tons.
The blockade in the Strait of Hormuz has increased demand for coal in European and Asian markets, increasing the use of coal-fired power stations.
U.S. coal producers see the crisis as an opportunity to boost sales and enter international markets, but rising fuel costs are hampering their efforts.
“It’s frustrating,” said Jimmy Brock, CEO of Core Natural Resources and vice chairman of President Donald Trump’s newly reformed National Coal Council. “Diesel plays a huge role in our costs, and the price only continues to rise due to the crisis.”
Trump has made supporting the industry and boosting U.S. exports a key pillar of his presidency, issuing an executive order in April to “revive America’s beautiful clean coal” and “promote and identify export opportunities” for the sector.
However, the trade war with China has hit the sector hard, with exports falling by 18 percent in 2025 due to Chinese tariffs imposed in response to Trump’s trade war.
The crisis in Iran could be a golden opportunity for the industry to boost its international sales and make up lost ground.
Brock said he expected the company’s exports to rise 10 percent this year and that it was taking orders not only from typical coal importers, including India and China, but also from “surprise markets” such as Indonesia and Vietnam.
But he added that U.S. producers were at a geographical disadvantage compared to those closer to Asian markets, making them much more vulnerable to rising transportation costs.
“Someone mining in Australia can get the coal there faster and cheaper than us,” he said.
Coal producers rely heavily on diesel-powered machinery, as well as trucks, trains and ships used to transport their coal from mines to utilities and ports for export.
Diesel costs represent as much as 25 percent of surface miners’ costs, and 12 percent of underground operations, Bank of America analysts say.
According to data from the US Energy Information Administration, the price of diesel for trucks has risen 48 percent since the start of the war in Iran.
Meanwhile, the cost of transporting coal by rail from industrial hotspots Appalachia and Pittsburgh to export hubs on the East Coast will rise more than 4 percent in May, according to Argus estimates, while transportation costs to domestic markets such as Florida and Tennessee will rise 8 percent.
According to Bank of America, the cost of shipping from North America to China has increased by as much as 55 percent.
Some US producers with overseas operations have managed to take advantage of the crisis, including Peabody, which has been shipping coal from its Australian mines to Asia.
Chief executive Jim Grech told the FT that the company was experiencing “stronger demand and prices” for its exports, “given the scarcity and rising prices” of liquefied natural gas in Asia.
Newcastle coal, the benchmark for Australian coal typically shipped to Asian markets, has risen 22 percent since the conflict began.
However, analysts said the crisis is unlikely to help much in the company’s decade-long effort to boost its U.S. export business.
Prices in the U.S. have risen, but not enough to boost production, so companies already locked into supply contracts will have little surplus to send abroad.
“There is a battle between domestic coal use and exports,” said Tony Knutson, head of thermal coal research at consultancy Wood Mackenzie. “It’s difficult to change mine plans by hiring more crews or increasing production hours to increase production; that doesn’t happen overnight.”
The prospects for U.S. coal producers could slip even further if the Strait of Hormuz opens and the price of natural gas falls, said Andy Blumenfeld, coal analyst at OPIS’s McCloskey, pointing to the drop in natural gas and coal prices in Europe after the two-week ceasefire was announced earlier this month.
However, the crisis could still boost overall demand and boost U.S. exports as the uncertainty of negotiations between the U.S., Iran and Israel leads utilities and governments to reassess the risk of relying on “uncertain oil and natural gas supplies.”
“The primary premise applies as the Strait of Hormuz remains closed,” he said, adding that “the war has highlighted the risks of relying on critical supplies from the Persian Gulf,” which is “likely to have a lasting effect.”
