The Strait of Hormuz is closed. Our fuel comes from Asia. Asia’s fuel comes from the Middle East. This page collects the verified facts, the supply chain data, and the legislation that applies.
On 28 February 2026, the US and Israel launched strikes on Iran. Iran responded by effectively closing the Strait of Hormuz — a narrow waterway through which 20% of the world’s oil flows daily. It’s been closed for over three weeks.
Australia imports 90% of its refined fuel from Asian refineries. Those Asian refineries get 60-70% of their crude oil from the Middle East — via the Strait of Hormuz. That supply is now cut.
The government says fuel supply is assured until mid-April. After that, it depends on the war. Energy Minister Chris Bowen confirmed on 22 March that 6 of 81 expected fuel tankers have been cancelled or deferred. Some have been replaced with alternative sources. Some haven’t.
US and Israel strike Iran. The Strait of Hormuz is effectively closed. The last oil tanker through (the Eagle Vellore) made a dash past Iranian Revolutionary Guard warnings.
Hapag-Lloyd suspends all Strait of Hormuz transits. Commercial shipping halts. Insurance rates for the region go through the roof.
China bans refined fuel exports. South Korea caps exports. Thailand bans most refined exports. Asian refineries begin cutting output. Singapore and Malaysian refineries shut units.
Australian diesel hits $2.40/L (national average, five largest cities). Regional areas see $3/L. 107 NSW stations report diesel dry-outs. Panic buying begins.
Government releases 762 million litres from reserves — about 5-6 extra days of supply. Sulphur standards relaxed for 60 days. Fuel Security Payment extended to 2030 to keep our last 2 refineries running.
National Fuel Supply Taskforce formed. Western leaders issue joint statement condemning Hormuz closure. IEA authorises coordinated strategic petroleum reserve release. Japan releases 45 days of reserves.
Brent crude at $112/barrel (was $70 in February). ABC News reports “crunch time” as Asian refineries run short. Petrol nationally $2.08-2.36/L. Perth smashes historic fuel price records. Fuel theft rising.
Australia’s primary refined fuel suppliers are prioritising domestic supply. The table below shows each country’s response and its relevance to Australian imports.
| Country | What They Supply Us | What They’ve Done |
|---|---|---|
| China | 28% of our jet fuel | Banned all refined fuel exports |
| South Korea | Biggest source of refined products | Capped exports at 2025 levels, price controls, may tighten further |
| Thailand | Refined fuel supplier | Banned most refined fuel exports including jet fuel |
| Singapore | 20% of our jet fuel | Refineries reducing output and shutting units |
| Japan | Refined products | Released 45 days of reserves, prioritising domestic |
“If you’re South Korea, you’re going to prioritise your own citizens first before you think about what you’ll do with the leftover refined product that you have.”Saul Kavonic, MST Marquee — ABC News, 22 March 2026
Alternative sources exist (US Gulf Coast, West Africa, Russia), but they take longer to ship, are the wrong grade of crude for Asian refineries, and cost significantly more. And if Trump enacts a US export ban — which analysts consider likely because it’s politically attractive — that removes the largest alternative supply for the entire world.
Fuel supply directly affects the food supply chain. Diesel powers Australian agriculture and freight transport.
Australian agriculture consumes 800-900 million litres of diesel annually. Diesel powers 84% of primary industry energy use — tractors, harvesters, irrigation pumps, grain handling, and every truck that moves food from paddock to plate. There is no short-term substitute.
On-farm fuel storage typically buffers only 10 days. Regional distributors are already being rationed. Farmers in multiple states have reported running out of diesel and halting work.
Australia imports 90-95% of its fertiliser. For urea (the most critical nitrogen fertiliser), 50-64% comes from Gulf states — Saudi Arabia, Qatar, UAE, Oman, Bahrain. All shipped via the Strait of Hormuz.
Australia closed its last domestic urea plant. The replacement (Perdaman Karratha) isn’t expected until 2027. Current urea prices already exceed $1,200/tonne.
Winter crops (wheat, barley, canola) need fertiliser and diesel for planting in April-June 2026. Miss that window and yields drop permanently for the season. There’s no second chance — agriculture is seasonal and irreversible. The National Farmers’ Federation warns of up to 50% food price rises if diesel shortages persist through seeding.
Australia produces roughly 170% of its caloric needs — we’re a net food exporter. We won’t run out of food. The risks are: price spikes (15-50% depending on severity), spotty availability of specific items (especially fresh produce), and supply chain delays as diesel gets rationed. Supermarkets will keep functioning — but your weekly shop will cost more, and some shelves may be thin.
Australia has existing legislation for fuel supply emergencies. The following Acts of Parliament are relevant to the current situation.
| Legislation | Year | What It Enables | Status |
|---|---|---|---|
| Liquid Fuel Emergency Act | 1984 | Fuel rationing, directing where fuel goes, compelling companies to hand over stocks, overriding state laws, seizing fuel for non-compliance. Cannot control prices. | Never activated |
| Biosecurity Act | 2015 | Movement restrictions, travel bans, contact tracing — the one used for COVID (18 Mar 2020 – 17 Apr 2022) | Used for COVID |
| National Emergency Declaration Act | 2020 | General “nationally significant harm” trigger that can activate other Acts including the Liquid Fuel Emergency Act. Extendable in 3-month blocks. | Never activated — not even for COVID |
The pathway: Middle East crisis → fuel shortage escalates → National Emergency Declaration Act 2020 activates → triggers Liquid Fuel Emergency Act 1984 → government-mandated rationing, supply direction, essential services priority.
The government has not activated these powers. Energy Minister Bowen says rationing is “not planned but not ruled out.” The Fuel Supply Taskforce has specifically referenced the 1984 Act in its mandate.
Almost certainly yes. Australian electricity runs on coal (45%), renewables (36%), and gas (17%). Oil provides just 1.7% of generation. Our gas and coal are domestic. The electricity grid is not directly threatened by an oil import crisis. This is about fuel and food — not power.
Fuel prices stay elevated ($2.50-3.50/L) through mid-2026. Localised shortages in regional areas continue. Food prices rise 15-30% over 3-6 months. No formal rationing, but station limits and informal restrictions. Government uses diplomacy and LNG leverage to maintain some supply. Economic recession likely — Westpac models GDP -0.5%.
Hormuz stays closed 6+ months. US enacts export ban. Liquid Fuel Emergency Act activated. Government-mandated fuel rationing with priority order: essential services, agriculture, public transport, then private. Significant agricultural disruption. Food price rises of 30-50%. Possible National Emergency Declaration.
Ceasefire or diplomatic resolution reopens Hormuz. Alternative supply routes stabilise. Prices elevated but physical supply maintained. Agricultural season proceeds with cost pressure but no production loss. Prices normalise over 3-6 months.
“We’re talking about 20 per cent of the global market. That’s just impossible. That’s the black swan event.”Neil Crosby, Sparta Commodities — ABC News, 22 March 2026
The following is a reference list of practical considerations organised by category.
Long-shelf-life staples that can be added gradually to regular shops and rotated through normal use.
Standard practice is to rotate stock — consume from the buffer and replace what’s used.
| Signal | What It Means |
|---|---|
| Liquid Fuel Emergency Act activated | Government-mandated fuel rationing begins. Priority allocation to essential services, agriculture, public transport. |
| More Asian countries ban fuel exports | Australia’s available import sources narrow further. South Korea is the largest current supplier. |
| US refined fuel export ban | Removes the largest alternative supply source globally. Analysts consider this likely due to domestic political pressure. |
| National Emergency Declaration | Broader emergency powers activated. Has never been used — including during COVID. |
| Fertiliser supply disruptions | Food price increases follow 3-6 months later due to reduced yields. |
| Ceasefire or Hormuz reopening | Shipping resumes, supply normalises over 3-6 months. Prices remain elevated during recovery period. |
Australia closed 6 of 8 refineries over two decades. It holds the lowest fuel reserves of any IEA member nation (non-compliant since 2012). It imports 90% of its refined fuel and 90-95% of its fertiliser. The strait that carries 20% of global oil has been closed since late February 2026.
The government says supply is assured until mid-April. Beyond that, the outcome depends on the duration of the conflict, whether alternative supply routes can compensate for a 20% global shortfall, and whether Australia’s Asian trading partners have exportable surplus after meeting their own domestic needs.
The key date to watch is the April-June winter crop planting window. If diesel and fertiliser supply is not restored by then, food price impacts follow 3-6 months later regardless of what happens to the conflict.
All data on this page is sourced from the following public records, government agencies, and reporting.