Global oil markets are tightening as the Middle East conflict disrupts key supply routes, particularly through the Strait of Hormuz. Brent crude briefly surged above US$114 per barrel, as attacks on infrastructure and shipping continue to constrain flows and drive-up costs.
Australia is now feeling those impacts in real time. Despite avoiding a full-scale supply collapse, the country’s fuel security has been exposed, with reserves sitting at just ~30 days for diesel and jet fuel. Shortages are emerging at the retail level, particularly in regional areas, with 55 Queensland stations out of diesel, and hundreds across NSW and Victoria running out of at least one fuel type. In response, the federal government is stepping in aggressively, introducing powers to underwrite fuel imports using taxpayer funds, allowing agencies like Export Finance Australia to guarantee, insure, and finance emergency cargoes on the spot market. Demand-side measures are also emerging, including fuel caps and public transport incentives aimed at easing pressure.
At the same time, the shock is accelerating a structural shift. Surging petrol prices and supply uncertainty are driving a sharp rise in electric vehicle adoption globally and in Australia. New data shows used EV sales more than doubling, while resale values for recent models have jumped significantly. Financing demand is also spiking, with NAB reporting a 100% increase in EV loans since early March. What began as a supply shock is now reshaping consumer behaviour, pulling forward the transition away from fuel dependence.
