Imagine waking up to headlines of a major global conflict disrupting oil supplies, and suddenly, the fuel you rely on for your daily commute is in jeopardy. That’s the scenario Australians are grappling with as tensions between the U.S., Israel, and Iran escalate, raising fears of fuel shortages and skyrocketing prices. But here’s the kicker: Labor insists Australia won’t run out of fuel. So, how much do we actually have, and how long will it last? Let’s dive in.
‘There’s no need to panic-buy petrol,’ Treasurer Jim Chalmers reassured Australians earlier this week, addressing the growing anxiety sparked by the conflict in the Middle East. His message comes amid reports of Costco service stations running dry and long queues at petrol stations as drivers rush to fill up before prices surge. But is this panic warranted, or are we overreacting?
And this is the part most people miss: Three days into the missile strikes on Iran—one of the world’s largest oil producers—Energy Minister Chris Bowen echoed Chalmers’ sentiment, stating, ‘The only thing to fear is fear itself.’ Sound familiar? It’s eerily reminiscent of the toilet paper shortages during the COVID-19 pandemic. But unlike toilet paper, Australia does have a strategic reserve of petroleum products. So, what exactly is this reserve, and is it enough to keep us going?
Here’s the deal: The conflict has effectively shut down the Strait of Hormuz, a critical chokepoint for one-fifth of the world’s seaborne crude oil. This has sent energy prices soaring, leaving motorists worried about both the cost and availability of fuel. Australia imports a staggering 90% of its liquid fuel—petrol, diesel, and aviation fuel—mostly from refineries in Singapore, South Korea, and Japan, which themselves depend on Middle Eastern crude oil. With only two domestic refineries left (down from 12), both reliant on government support, our vulnerability to global supply disruptions is glaringly obvious.
But here’s where it gets controversial: While the 2020 federal government review on liquid fuel security suggests we’re safe as long as the disruption is resolved within six months and emergency stocks are released globally, some experts argue this is overly optimistic. Tony Wood, a senior fellow at the Grattan Institute, points out that the geopolitical landscape has shifted dramatically, and our current reserves—36 days of petrol, 34 days of diesel, and 32 days of jet fuel—may not be sufficient if the crisis drags on. Is 35 days of reserves really enough? Or are we gambling with our energy security?
Another point of contention: Australia is technically obligated to hold fuel stocks equivalent to 90 days of imports under an International Energy Agency agreement. The reality? We’ve never met this target. So, if global supply lines were completely cut off today, we’d run out of fuel by early April—assuming consumption rates stay the same. But let’s be clear: a total cutoff is unlikely. It would require a catastrophic regional conflict shutting down all shipping to Australia. Still, the question remains: Are we doing enough to future-proof our energy needs?
Here’s the bottom line: While there’s no immediate threat of fuel imports drying up, our heavy reliance on overseas supplies and limited domestic refining capacity leave us exposed. The current stockpiles provide a buffer, but they’re not a long-term solution. As Wood puts it, ‘If the risks are increasing, it makes sense to take out more insurance.’ So, what do you think? Are we prepared, or are we playing with fire? Let’s hear your thoughts in the comments—this is one debate where every opinion counts.
