An energy expert has warned Australians could be faced with a fuel rationing scenario within months amid heightened tensions in the Middle East.
The Strait of Hormuz, one of the world’s busiest shipping lanes, has been hit with further disruptions, with Iran recently declaring that the Strait of Hormuz had re-closed to traffic.
It comes amid an escalation of hostilities between the US and Iran, with both sides launching strikes on targets in the Middle East in recent days.
MST Financial senior energy analyst Saul Kavonic said global fuel stocks have already taken a hit after the Strait’s initial closure, casting uncertainty over the availability of future supplies.
“So far we’ve been living off the oil market credit card,” Mr Kavonic told News Corp.
“We’ve only managed to get through the last few months by drawing on the stocks that we have, so we’re on borrowed oil.
“And that credit card will max out within a few months if we continue to borrow the way we have because the Strait remains closed.”
He also warned that continued disruptions to the waterway could result in fuel rationing measures being implemented in Australia.
“If the Strait remains closed, then by September, the risk that Australia will have to pursue some form of demand management or rationing grows significantly and, to give it a magnitude, it’s probably two to three times the risk of what we saw in March and April,” Mr Kavonic said.
“Australia’s fuel stock is actually higher than it was prior to the war, but they’re still very low by global standards.”
Retired Air Vice-Marshal John Blackburn AO said fuel prices would likely increase in coming months regardless of potential rationing measures.
“Price rises in the end is market control, not done by government, but people change their consumption behaviours,” he said.
Oil prices have climbed to a five-week high amid escalating tensions in the Middle East, with Brent futures rising two per cent to US$91.01 a barrel on Tuesday.
US West Texas Intermediate crude gained US$1.68, to settle at US$84.91.
Meanwhile, Australia has reached its highest fuel stockpile since the US-Iran conflict began, with Prime Minister Anthony Albanese on Saturday saying that the country now holds a total of 6.5 billion litres of fuel across all fuel types.
“This is the highest total amount of fuel in Australia since we introduced our fuel stockholdings, highest ever,” he said.
The Prime Minister also revealed 55 fuel tankers carrying 3.2 billion litres of fuel are scheduled to arrive in Australia over the next four weeks.
-With Reuters