If Israel hits back at Iran’s weekend drone and missile attack and Iran retaliates by disrupting the Strait of Hormuz - a narrow waterway nearby through which a quarter of global maritime oil trade flows - global oil markets will face a major choke point. This could be mitigated by exporters using more time consuming routes, but the damage to oil prices could be significant and long-standing. There are not many alternative routes from main production sites to Western countries. If logistics are affected, consumers may face shortages once again. And Australia is not in a great position to weather that. Despite being a member of the International Energy Agency, Australia does not maintain oil stocks equivalent to at least 90 days of consumption, as required. According to Australia Petroleum Statistics, current diesel stocks are estimated to last only about 26 days, with petrol stocks close behind at 27 days.
Opec gameover
If Israel hits back at Iran’s weekend drone and missile attack and Iran retaliates by disrupting the Strait of Hormuz - a narrow waterway nearby through which a quarter of global maritime oil trade flows - global oil markets will face a major choke point.
This could be mitigated by exporters using more time consuming routes, but the damage to oil prices could be significant and long-standing. There are not many alternative routes from main production sites to Western countries.
If logistics are affected, consumers may face shortages once again. And Australia is not in a great position to weather that.
Despite being a member of the International Energy Agency, Australia does not maintain oil stocks equivalent to at least 90 days of consumption, as required.
According to Australia Petroleum Statistics, current diesel stocks are estimated to last only about 26 days, with petrol stocks close behind at 27 days.
Harris Tunnel