It is a good thing that the March quarter closes off next week as there will be a level of compulsion for mining and exploration companies to declare in their subsequent quarterly reports what impacts the fallout from the Iran War is having on their supply and cost of diesel.

The nightly news on the growing number of petrol stations either short or running out of diesel/petrol supplies is not a reliable indicator of what is happening out at the off-grid mine and exploration sites with their particular reliance on diesel.

The headlines are reporting the oil price surge is due to as much as 10% of the world’s daily oil supplies being trapped inside the Strait of Hormuz.

Alarming for sure, but not as alarming as the conflict knocking out any supply at all from the huge fleet of refineries in region that process oil to diesel, petrol, jet fuel, nitrogen, naphtha and other critical refined products.

The resultant squeeze on refined products like diesel must be starting to tell on the mining and exploration sector and there will be investor pressure for the upcoming quarterly reports to detail whether a company’s operations are being impacted.

There is a suspicion that many are being impacted. They are just not saying. Having said that, a couple of diesel impact disclosures have made their way to the ASX platform in recent days.

St Barbara said its diesel needs at its Simberi gold mine in PNG are covered for at least here months while junior iron ore producer Fenix said it was taking steps to scale back non-essential activity in response to a lack of fuel supply from is diesel suppliers, and the temporary (hopefully) impact – if any – of Cyclone Narelle.

Congrats to St Barbara and Fenix for clearing the air. The rest of the miners and explorers need to do the same or suffer the now daily chatter of who is feeling the pinch for a lack of diesel supply and its escalating cost.

As each day passes and the fleet of Middle East refineries remain shuttered, and the Strait of Hormuz remains closed, preventing oil supplies to customer refineries elsewhere, the more of a problem diesel supplies and cost will become.

It can be argued that sentiment in the mining sector should be riding high on the potential for higher commodity prices to emerge in response to mine production being hit and/or curtailed should diesel supply become a chronic and long-lasting problem.

But the global economy not being tipped into recession from the oil shock is a far more preferable outcome.

Juniors:

None of the major miners have put up their hand to say the diesel shortage and its record pricing is impacting their operations in terms of volumes and cost. There will be commentary on the situation in their quarterlies, or least there should be.

But what of the explorers?

It is a subject that RBC Capital Markets has covered off on in a research note, ostensibly on the outlook for the laboratory services giant ALS on which it has a $22.50 price target compared with Thursday’s close of $20.15.

In a summary of the responses, RBC said that in isolation, the inflated diesel price was not a concern for the drillers.

“Junior drillers are more concerned with being able to access diesel at all given the majors have contracts in place with diesel suppliers that will absorb the majority of diesel in the market,” RBC said.

Diesel transportation services to sites have largely dried up with drillers having to source diesel themselves.

“One exploration company has already been notified by its driller that a diesel levy would be applied with the exploration company bearing the cost,’’ the RBC summary said.

“Lastly, a consistent theme was that diesel is a consideration in a drill program but not the only consideration.

“When drill rigs and labour are in high demand and difficult to source (as they have been through 4Q25 and in early CY26), native title and permitting is challenging to attain, then the likelihood that a drill program is delayed through elevated energy costs is extremely low.”

RBC said it meant that already-funded drill programs will go ahead despite the increased cost of energy and elevated macroeconomic risk.

“The $21.4bn of equity capital raised in CY25 by juniors/intermediate exploration companies was a 109% increase on CY24 (and reversal of a three-year downward trend) and should support these drill programs,” RBC said.

 “That said, a consistent message from explorers was that unfunded projects would have significant difficulty raising money in the current environment – this will be a timing and duration issue (and not a fundamental issue) that is largely linked to the current conflict in the Middle East.”

Killi Resources (ASX:KLI):

Killi Resources (ASX:KLI) has been recognised as an honest toiler in the exploration space since its $6 million IPO in February 2022.

But despite signing up South African heavyweight Gold Fields for a big-spending joint venture on its West Tanami ground in WA, and progress in the hunt for a big gold system in Queensland, it has remained a micro-cap.

Last Friday it was a $7m company. But how things can change in a hurry as today it is a $36m company (19c a share) which is probably where it should have been on the appeal of the Tanami and Queensland exploration projects.

The big change factor was Monday’s news that Nev Power of former Fortescue and National COVID-19 Co-ordination Commission fame has been appointed Killi’s non-executive chairman.

What’s more, Steve Parsons and Mike Naylor of the Richardson Street success machine (Bellevue, FireFly, Andean Silver, Alicanto, Cygnus and others ) have been appointed as consultants, and Hamish Halliday of multiple company successes himself has been appointed a technical consultant.

A $1.4 million placement at 3.8c a share was cornerstoned by Power and the Richardson Street guys. Power’s incentive to mix it down in the junior end of the market was 7 million performance rights that vest on Killi shares holding at or above 10c for 20 consecutive days.

Everyone’s a winner so far given Killi’s share price has about quadrupled since Monday’s announcement. Funds from the placement are earmarked for more work at the Mt Rawdon West gold project in Queensland (Gold Fields looks after the West Tanami program) and “due diligence on potential new growth opportunities”.

While the hunt for gold deposits in Queensland and WA could well excite in the near-term, it was the reference to new growth opportunities that has got the market’s interest up, with the Richardson Street crew having a knack of finding an over-looked asset and then hitting it with the drill bit to create serious value, most recently at FireFly and Andean Silver.