The Strait of Hormuz Just Closed and Australia Has 36 Days of Fuel Left
Something most Australians never think about just became the most important waterway in their daily lives. The Strait of Hormuz, a narrow passage between Iran and Oman that most people couldn't point to on a map, effectively shut down over the weekend. And the ripple effects are already showing up at servos from Sydney to Perth.
Here's what happened. On Friday, the United States and Israel launched coordinated military strikes on Iran, reportedly killing Supreme Leader Ali Khamenei. Iran's Revolutionary Guard Corps responded by declaring the Strait of Hormuz closed, warning that any ship entering would be "set on fire." That's not bluster for the sake of it. At least three tankers have already been struck near the strait, including one off Oman that was set ablaze. One seafarer is confirmed dead. Major shipping companies, including Maersk and Hapag Lloyd, have suspended all transits.
Ship tracking data shows a 70 per cent reduction in traffic through the strait. More than 150 vessels are anchoring outside, waiting to see what happens next.
Why should you care? Because roughly 20 million barrels of crude oil pass through that strait every single day. That's about 20 per cent of all seaborne oil on the planet. When it stops flowing, the entire global energy market feels it within hours.
What It Means at the Bowser Right Now
If you filled up in Melbourne, Brisbane, or Sydney on Monday, you might have paid around 171 cents per litre for unleaded. By Tuesday, those same servos were posting 211 to 213 cents. That's a 40 cent jump virtually overnight.
NRMA spokesperson Peter Khoury has told Australians to expect prices to rise about 10 per cent from wherever they were sitting before the crisis. But here's the thing most people don't realise about how fuel pricing works in this country. Whatever happens on global oil markets takes roughly seven to ten days to fully flow through to Australian bowsers. Which means we haven't seen the worst of it yet.
Brent crude surged between 10 and 13 per cent in the first trading sessions after the strikes. Analysts at Wood Mackenzie are forecasting potential rises to $100 per barrel or higher if the disruptions persist. To put that in perspective, every $10 increase in the oil price adds roughly 7 to 10 cents per litre at your local servo.
Drivers across Adelaide, Darwin, and regional Queensland are likely to feel this hardest. Regional areas always cop the biggest margins, and when wholesale prices spike, those margins tend to widen rather than narrow.
Australia's Uncomfortable Truth
Here's where the story gets properly concerning. Energy Minister Chris Bowen fronted parliament with numbers that should make every Australian pause. We have 36 days of petrol reserves. 34 days of diesel. 32 days of jet fuel.
Those are the highest levels in 15 years, which sounds reassuring until you learn that the International Energy Agency requires all member countries to hold at least 90 days of oil reserves. Australia has 48 days of total coverage. That makes us the worst positioned of the 27 net oil importing countries in the IEA. Dead last.
The real story behind those numbers is even more stark. Australia once had seven oil refineries. We're down to two. Ampol's Lytton refinery in Brisbane processes about 110,000 barrels per day. Viva Energy's Geelong refinery near Melbourne handles around 120,000. Together, they cover less than 30 per cent of Australia's fuel needs.
The rest? We import it. Over 70 per cent of our refined fuel comes from overseas. And around three quarters of the crude oil those two remaining refineries process is itself imported. The government is paying Ampol and Viva up to $2.3 billion through 2030 just to keep those plants running, because without subsidies they'd likely close too.
When you break it down, Australia is an island nation that grows a fair chunk of the world's food, mines enormous quantities of resources, and relies on ships passing through potential conflict zones to keep its cars moving and its trucks delivering goods.
Haven't We Been Here Before?
Fair question. During the 12 day conflict in 2025, Australian fuel prices rose between 5 and 10 per cent before settling back to normal within days of the ceasefire. There's a reasonable chance this follows a similar pattern.
But there are important differences this time. The 2025 conflict didn't close the Strait of Hormuz. This one has, at least effectively. A 70 per cent reduction in traffic through the world's most critical oil chokepoint is unprecedented in modern history. Not during the Iran Iraq war of the 1980s, not during the tanker wars, not during any previous escalation has the strait been this disrupted.
The other factor worth watching is what happens to freight and insurance costs. Even if the strait reopens tomorrow, the shipping industry has been rattled. Insurance premiums for tankers transiting the Persian Gulf will spike and stay elevated for months. Those costs get passed along the supply chain and eventually land on the price board at your servo.
What Smart Motorists Should Do
First, don't panic buy. Australia's 36 days of reserves, while inadequate by international standards, means we're not about to run dry. Panic buying creates artificial shortages and pushes prices higher than they need to go. We saw this during COVID and it made everything worse.
Second, understand the price cycle. If you're in Sydney, Melbourne, Brisbane, Adelaide, or Perth, fuel prices still follow cycles. Even during a global crisis, those cycles persist. Filling up at the bottom of a cycle can save you 20 to 30 cents per litre compared to catching it at the peak. Use Petrolmate's interactive fuel map to check your local area before heading to the servo.
Third, shop around. During price spikes, the spread between the cheapest and most expensive servos in any given suburb widens dramatically. We've tracked differences of 30 cents or more within the same postcode during volatile periods. Suburbs like Blacktown and Parramatta in western Sydney or Dandenong and Frankston in Melbourne's south east consistently offer better value than inner city stations.
Fourth, if you drive diesel, keep a closer eye on things. Australia's diesel supply is more vulnerable than petrol because diesel is critical for freight, agriculture, and mining. In a prolonged supply crunch, diesel prices tend to run ahead of petrol.
The Bigger Picture
This crisis exposes something Australian governments of both stripes have kicked down the road for decades. We let five of our seven refineries close. We never built strategic reserves to IEA standards. We became more dependent on imported fuel even as geopolitical risks in our supply corridors increased.
The Fuel Security Act 2021 and the minimum stockholding obligation were supposed to start fixing this, with the government committed to reaching IEA compliance by 2026. That deadline is here and we're still well short.
None of this is to say the sky is falling. Oil markets have weathered crises before. The strait will likely reopen in some form once the immediate conflict de escalates. And Australia's geographic distance from the Middle East, while it makes us import dependent, also means we draw crude from diverse sources. The Middle East accounts for roughly 17 to 23 per cent of our crude imports, not the majority.
But for anyone who's ever wondered why fuel security policy matters, or why those two remaining refineries in Brisbane and Geelong are worth $2.3 billion in subsidies, this is your answer. It matters because when a strait most Australians have never heard of closes on a Friday night, the price on the board at your local servo changes by Monday morning.
Keep an eye on this one. It's the kind of story that could blow over in a week or reshape the fuel landscape for years. Either way, your wallet will feel it before the politicians finish their press conferences.
*For a comprehensive, data-driven analysis of the crisis including state-by-state price tables and household cost calculations, read our Special Report: Petrol Prices Just Rose 31 Cents in Three Weeks.*
