With headlines blaring about escalating tensions in the Middle East—particularly between Iran, Israel, and the United States (US)—it’s only natural to worry that another fuel price shock is on the horizon.
After all, many of us still remember the wallet-thumping pain at the pump when Russia invaded Ukraine in 2022, sending oil prices soaring to dizzying heights. But before you start rationing your weekend drives or dusting off the bicycle, let’s take a closer look at what’s happening—and what it means for your next fill-up.
The Middle East has long been the world’s oil heartland, and any sign of trouble there tends to jitter global markets.
The Strait of Hormuz, a narrow waterway off Iran’s coast, is especially crucial: about 20 per cent of the world’s oil supply passes through it. If that chokepoint were ever closed, the impact on global oil prices would be immediate and severe.
But here’s the good news: so far, despite the recent missile exchanges and heated rhetoric, Iran has agreed to a ceasefire, and the Strait remains open.
Oil prices spiked dramatically after the Ukraine conflict and have barely budged this time. They hover around $78 to $79 a barrel, far from the $128 US dollar-peak we saw in 2022.
You might be surprised to learn that Australia is less dependent on Middle Eastern oil than you think.
According to Mark McKenzie, chief executive officer of the Australasian Convenience and Petroleum Marketers Association, less than two per cent of our oil comes from the region.
That means our domestic supply is relatively insulated from Middle Eastern turmoil—at least for now.
‘Oil traders post-COVID are used to a bit of global instability,’ McKenzie said, suggesting that the market has become more resilient to geopolitical shocks.
So, will prices go up?
The short answer: probably, but not by much. While the experts agree that a catastrophic price surge is unlikely, some modest increases are already being felt.
Peter Khoury from the National Roads and Motorists’ Association (NRMA) noted that regular unleaded has recently increased by about 8 cents a litre and expects further limited increases.
‘Prices won’t get as low as we hoped, and will probably be higher than we expected before the recent escalation,’ Khoury said.
Still, he pointed out that many Australian capitals are currently at the bottom of their price cycles, making it a good time to buy if you spot a bargain.
What can you do to save at the pump?
- You don’t need to rush out and fill every jerry you can own. The supply chain is stable, and panic buying only drives prices up.
- Use apps like the My NRMA or FuelCheck to find the cheapest petrol in your area. Prices can vary by as much as 20 cents a litre between stations just a few kilometres apart.
- Petrol prices in Australia follow a regular cycle, especially in major cities. Try to fill it out when prices are at their lowest point.
Of course, the situation in the Middle East is constantly evolving. If tensions were to escalate dramatically—especially if the Strait of Hormuz were closed—then all bets would be off, and we could see a much sharper price spike.
For now, though, the consensus among experts is that the risk of a significant disruption remains low.
Are you feeling the pinch at the pump, or have you found clever ways to keep your fuel costs down? Have you changed your driving habits or considered alternatives like public transport or even an electric vehicle? We’d love to hear your thoughts and tips—share your experiences in the comments below!
Also read: Israel’s attacks on Iran are already hurting global oil prices, and the impact is set to worsen
