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Fuel prices could continue to fluctuate as global oil markets react to the escalating conflict in the Middle East, but officials say New Zealand’s fuel supply remains stable for now.
The Ministry of Business, Innovation and Employment (MBIE) says it is closely monitoring the situation after tanker traffic through the Strait of Hormuz, one of the world’s most important oil shipping routes, slowed dramatically.
“Due to the Middle East conflict, the number of tankers transiting the Strait of Hormuz has come to a near standstill,” MBIE said in a March 11 update.
“The Strait of Hormuz is a key chokepoint for global oil trade, facilitating the passage of around 20 percent of global oil supply.”
Around 80 percent of the crude oil passing through the strait is destined for Asian refineries, which supply the petrol, diesel and jet fuel used in New Zealand.
Despite the disruption overseas, fuel companies say there are currently no significant supply chain issues affecting New Zealand.
Under the Government’s Minimum Stockholding Obligation (MSO), introduced on January 1, 2025, fuel importers must maintain minimum stock levels either in New Zealand or within the country’s Exclusive Economic Zone.
The required minimum levels include 28 days’ supply of petrol, 21 days of diesel and 24 days of jet fuel.
MBIE says it is actively assessing the fuel security situation and remains in close contact with fuel companies. The ministry has also convened the Fuel Sector Coordinating Entity under the National Fuel Plan to increase oversight of imports and monitor any risks.
As of midnight on Sunday, March 8, industry figures showed fuel stock levels remain broadly unchanged from the previous week.
These figures include fuel stored in New Zealand as well as shipments already at sea within the country’s Exclusive Economic Zone or on their way.
Fuel companies say any variation in stock levels is within normal operational ranges as shipments arrive and are unloaded across the country.
The Government will continue receiving updated stock figures from fuel companies each Tuesday, with public updates released every Wednesday.
New Zealand also has additional protection through its membership of the International Energy Agency (IEA), which coordinates responses to global energy supply disruptions. The IEA can organise the release of strategic oil reserves from member countries if necessary.
However, while supply remains steady, New Zealand is not immune to changes in global oil prices.
AA Principal Policy Advisor Terry Collins says fuel markets have been extremely volatile since the conflict escalated.
“Before the conflict started, oil prices sat at about US$72 per barrel. Last Friday it jumped to about US$93, by Monday it nearly reached US$120, and within 48 hours it was back down around US$90,” Collins says.
“It’s anyone’s guess where prices will land. For every dollar it changes, it eventually shows up at the pump.”
Collins says the level of uncertainty currently seen in global fuel markets is unusual.
“We’ve never seen volatility and uncertainty like this. Prices are jumping up and down with every development.”
