How Middle East Conflict Affects Australian Petrol Prices
Why events in the Persian Gulf hit Australian wallets within days. The chain from Strait of Hormuz to Singapore benchmark to your local servo, explained.
If you've noticed fuel prices climbing sharply in March 2026, you're not alone. The escalation of conflict in the Middle East — particularly the closure of the Strait of Hormuz — is sending shockwaves through global oil markets that land directly at Australian bowsers. Here's how that chain works, and what you can do about it.
Why the Middle East matters for Australian fuel
Australia doesn't buy much oil directly from the Middle East. But it doesn't need to — global oil is priced on a single interconnected market. When supply is disrupted anywhere, prices rise everywhere.
The current crisis centres on the Strait of Hormuz, the narrow waterway between Iran and Oman. Around 20–21 million barrels of oil pass through it every day — roughly 20% of the world's petroleum consumption and more than a quarter of all seaborne crude oil trade. There is no alternative route that can handle anywhere near that volume.
When that chokepoint is threatened or closed, oil traders immediately price in the risk of lost supply. Brent crude — the international benchmark — surged over 50% in the 10 days following the late February 2026 escalation, briefly touching US$119.50 per barrel before settling around US$104–110. That's the highest since Russia's invasion of Ukraine in 2022.
The chain: Persian Gulf to your local servo
Here's exactly how a Middle East crisis reaches Australian pump prices:
1. Crude oil markets react (hours)
Global oil futures spike the moment a supply disruption is confirmed or expected. Traders don't wait for actual shortages — they price in the risk of shortage. This happened within hours of the Strait of Hormuz closure announcement.
2. Singapore benchmark rises (days)
Australia's wholesale petrol price is set by the Singapore MOPS Mogas 95 benchmark — the cost of refined fuel at Singapore, the Asia-Pacific's largest refining hub. About 95% of Australia's wholesale fuel cost is determined by this benchmark. When crude oil rises, Singapore refining costs follow within days.
3. Australian wholesale prices adjust (1–2 weeks)
The Terminal Gate Price (TGP) — what fuel companies charge retailers at the depot — is updated to reflect the new Singapore benchmark plus shipping, insurance, and taxes. This typically takes 7–14 days to flow through in capital cities. Regional areas can take longer.
4. Pump prices rise (rockets up, feathers down)
Retailers adjust their prices based on wholesale costs. But there's an asymmetry the ACCC actively monitors: prices tend to rise faster than they fall. When wholesale costs spike, pump prices jump within days. When costs drop, prices drift down slowly over weeks. This "rockets and feathers" pattern means drivers pay the high price quickly but wait longer for relief.
How quickly does it hit Australian bowsers?
The typical lag between a major global event and Australian pump price changes is 7–14 days in capital cities. The NRMA cites 7–10 days; the ACCC says around two weeks.
This lag gives drivers a window to act. If a major Middle East event hits the news, you have roughly one to two weeks before it reaches the pump. Filling up before the spike arrives — and using a tool like BowserBuddy to find the cheapest station near you — means you're buying at prices that still reflect the old, lower wholesale cost.
During the current crisis, the RACQ referred major fuel retailers to the ACCC after some pumped up prices less than three days after the strikes began — well ahead of actual wholesale cost changes. The ACCC has warned fuel companies against gouging.
Why Australia is particularly exposed
A few factors make Australia more vulnerable to oil supply shocks than many countries:
- We import most of our fuel. Only two domestic refineries remain — Ampol Lytton in Queensland and Viva Geelong in Victoria. The rest comes from Singapore, South Korea, and Japan.
- Our fuel reserves are thin. Australia holds roughly 32–36 days of fuel stocks, well short of the 90-day reserve recommended by the International Energy Agency.
- 84% of crude oil transiting the Strait of Hormuz is destined for Asian markets — the same markets our fuel suppliers operate in.
This means a prolonged disruption would hit Australia harder and faster than countries with larger domestic production or deeper strategic reserves.
What this means for prices
With Brent crude at US$104–110/barrel (up from around US$67 before the crisis), the rough rule of thumb is that every US$10 rise in crude adds about 10 Australian cents per litre at the pump.
That suggests pump prices could rise 30–40 cents per litre above pre-crisis levels, potentially pushing ULP91 well above $2.00/L in most capitals. If the Strait remains closed for an extended period, some forecasters have flagged the possibility of prices exceeding $2.50/L.
However, taxes act as a partial buffer. The fuel excise (~53c/L) and GST together make up about 38% of the pump price, and they don't change with oil prices. So a 50% spike in crude doesn't mean a 50% spike at the pump — it's more like 25–30%.
What you can do
You can't control geopolitics, but you can control how you respond:
- Fill up now if prices haven't risen yet in your area — the lag means some stations are still on pre-crisis wholesale costs
- Compare prices daily — during volatile periods, the gap between the cheapest and most expensive stations widens significantly. That gap is your saving.
- Use loyalty discounts — the 4c/L from Everyday Rewards or Flybuys is worth more than ever when prices are high
- Don't panic-buy — Australia has weeks of supply in reserve. Panic-buying creates artificial shortages and pushes prices up further.
- Time the cycle — the regular price cycle still operates even during a global crisis. Filling up at the bottom of the cycle instead of the top can save 15–20c/L.
The bigger picture
The current crisis is a stark reminder of how connected Australian fuel prices are to events on the other side of the world. The mechanism — Middle East conflict → oil supply risk → Singapore benchmark → Australian wholesale → pump price — runs the same way every time, whether it's the 2022 Ukraine invasion, the 2023–24 Houthi Red Sea attacks, or the 2026 Iran escalation.
Understanding this chain won't make fuel cheaper, but it does give you a window to act before prices spike — and the knowledge to avoid paying more than you need to.