From a purely engineering standpoint a diesel engine will run on almost any type of oil, indeed the first diesel engine ran on peanut oil, and I often at the time I had run my 2008 Mitsubishi Warrior on vegetable oil.
By the time world war two came about there were very few coal fired ships in operation, oil was more efficient cheaper and less man power intensive, quicker at refueling in port and most coal ships were refitted in the 1920s to run on oil fired boilers.
Is it possible that a U boat could run on this? yes its entirely possible but running on low grade fuels often results in injector problems as well as clogs in the fuel filters all of which plagued the U boats in the later part of the war.
Current day warships use F76 or Bunker C fuel oil the Russians use Mazut the oil fuels need pre heating before being cycled into the filters and then into the engine, I am pretty sure the U boats would have had heat exchangers in the fuel tanks to pre heat the fuel this is very common in all oil fired ships.
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