New Zealand is counting its days, literally, amid fears of a global fuel shortage.
The US and Israel’s war on Iran is wreaking havoc on global oil and gas markets, spiking prices and sending shock waves across global economies.
Global oil giant, Saudi Arabia’s state oil company, Aramco, has said there would be “drastic” consequences for the world economy if the disruption continued.
Some commentators are calling it the “biggest oil disruption in history” and it’s believed oil could hit US$150 ($253) per barrel by the end of the month.
The Kākā journalist and publisher Bernard Hickey told The Front Page how the situation can affect petrol prices immediately.
“Some of the petrol companies will price for next week, as if we have to replace this litre of fuel with one that we’re buying right now from the refinery. So, you have to really watch what’s happening with refined diesel prices in Singapore, where it’s often traded.
“Asia Pacific is a little bit panicked right now to the point where the Philippines, for example, has already gone down to a four-day working week to try to conserve diesel. We’ve seen Thailand stop exporting refined products.
“South Korea, which provides about half of our refined fuel, is considering banning exports of refined fuel products so it can protect its own economy. China has already decided to ban exports of refined fuel, and that’s important for Asia Pacific because those Chinese refineries are a big part of the market.
“So we are at the end of a long supply chain,” he said.
From January 2025, the minimum stock obligation (MSO) came into force. It requires fuel industry participants, who meet certain criteria, to keep a minimum amount of fuel on hand.
The minimum coverages sit at 28 days of petrol, 24 days of jet fuel and 21 days of diesel.
As of March 8, the industry confirmed the current stock level as 57.9 days of petrol, 49.9 days of diesel and 46.8 days of jet fuel.
But, a portion of that – 25.2, 22.3 and 14.3 days respectively – is on the water.
“It’s worth knowing that sometimes these ships will divert halfway here or halfway to their destination because someone else has offered them a better price on the way,” Hickey said.
“It’s not a sure thing that the ship that’s on its way actually gets here with diesel. So this is something for those to think about, if we imagine the Strait of Hormuz stays closed for months rather than weeks.”
Since the 2022 closure of Marsden Point, New Zealand has shifted to relying predominantly on importing already refined products from Asian refineries. Before its closure, it supplied 70% of domestic fuel demand.
Stats NZ data shows South Korea provides the largest value of fuel imports – about 48% of the value of fuel imported over the 12 months to March 2025.
Singapore was the second largest source, contributing 33%.
In February 2025, the Ministry of Business, Innovation and Employment released a fuel security study conducted by Envisory and Castalia.
It was done to paint a picture of New Zealand’s reliance on fossil fuels and to investigate mitigation options. Headlines were dominated by the investigation into how much it would cost to reopen Marsden Point.
To better understand the societal and economic effects of either a domestic complication or an international disruption, the report’s authors created scenarios of varying impact.
“A severe disruption is an extreme event that disrupts supply to New Zealand completely, for an extended period. There are several potential causes, and New Zealand’s economy would be drastically and seriously impacted beyond fuel supply,” it reads.
“The Government would need to act quickly, including actions to manage remaining fuel supplies and their allocation to essential services.”
Overall, the total economic cost of supply disruption is estimated to be between $118 million (0.04% of GDP) and $2.4 billion (0.85% of GDP), depending on the severity of the disruption.
An international supply disruption scenario with a 50% fuel supply disruption would result in an estimated economic loss of 0.72% of GDP, or $2b.
In addition to fuel shortages, the report anticipated price increases across all fuel types because of international market reactions.
It used the Ukraine invasion as an example, when domestic prices increased by 30% for petrol, 92% for jet fuel and 58% for diesel.
“Our analysis suggests that a North Asian disruption could lead to price hikes nearly double those observed during the Ukraine crisis: approximately 60% for petrol, 184% for jet fuel, and 116% for diesel,” the report said.
It does conclude, though, that even if supply from the refineries that supply most of New Zealand’s fuel is interrupted, the time lag before supply arrives from alternative sources would have a comparatively lower impact.
A graphic detailing New Zealand’s refined fuel supply chains at the time of print showed how long it takes for shipments to reach our shores from the likes of South Korea (17 days), China (17), Japan (16), Brunei (16), Singapore (17-18), India (25), and the US (27 days).
However, the report suggests the most cost-effective strategies for enhancing fuel resilience are accelerating the transition to zero-emissions vehicles, adding trucking capacity and increasing diesel storage.
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The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5pm. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
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