In recent days, Australians have been anxious about potential spikes in petrol prices due to escalating tensions in the Middle East. However, experts suggest that there is little reason for alarm, as a significant price surge is unlikely at this time. Following Russia’s invasion of Ukraine in 2022, oil prices soared to approximately $US128 (over $190 AUD) per barrel.
Currently, despite missile exchanges involving Israel, Iran, and the US, oil prices have remained steady at around $78 to $79 per barrel. Mark McKenzie, CEO of the Australasian Convenience and Petroleum Marketers Association, stated that the market does not foresee major disruptions as traders have adapted to global instability in the post-COVID landscape.
Australia’s oil supply relies heavily on imports, with less than two per cent sourced from the Middle East, making the country relatively insulated from potential price fluctuations originating from that region. Though tensions remain, Iran has so far agreed to a ceasefire, which stabilises the situation further. However, should Iran decide to disrupt the Strait of Hormuz, a crucial shipping route, it could constrict global oil supply by about 20%, causing widespread effects on prices.
While McKenzie indicated that slight increases in petrol prices are possible, he noted that they are beginning from their lowest levels in four years. Peter Khoury from the NRMA echoed this sentiment, pointing out that prices have already risen by 8 cents per litre for regular unleaded petrol. He anticipates further limited increases, suggesting that petrol prices are unlikely to reach the lows expected prior to recent geopolitical escalations.
For now, experts recommend that consumers take advantage of current lower prices at the pump, as many Australian capitals are experiencing the tail end of a price cycle. The NRMA advises motorists not to panic and encourages them to utilise their app to find the best refuelling options. In summary, while there are factors that could influence petrol prices, immediate concerns regarding a massive spike appear overblown.