Australia Fuel Shortage: Will We Run Out of Fuel?

6 min read12 March 2026

The Australia fuel shortage fears are real — and they're hitting the hip pocket hard. With the Strait of Hormuz effectively closed since late February 2026, global oil markets are in turmoil and Aussie drivers are feeling the pinch at the bowser. Queues at servos, soaring prices, and growing anxiety about how much fuel Australia has left have dominated headlines.

But is panic buying making things worse? And will Australia actually run out of fuel? Let's break down what's happening, what it means for you, and what you can do about it.

What's Happening in the Strait of Hormuz?

The Strait of Hormuz is a narrow waterway between Iran and Oman — just 39 kilometres wide at its narrowest point. It's one of the most critical oil chokepoints on the planet. Before this crisis, roughly 20% of the world's liquefied natural gas (LNG) and 25% of all seaborne oil trade passed through the strait every single day.

On 28 February 2026, following the escalation of the US-Israeli military conflict with Iran, Iran's Revolutionary Guards began broadcasting that ship passage through the Strait of Hormuz was "not allowed." By 2 March, they officially confirmed the strait was closed and warned that any vessel entering would be attacked.

The impact was immediate. According to reports from OilPrice.com, daily ship traffic through the strait plummeted from around 138 vessels to just 2. Iran has also reportedly laid about a dozen naval mines in the waterway, making reopening even more complicated.

On 12 March, three cargo vessels were hit in the strait on the same day the International Energy Agency (IEA) announced a record release of 400 million barrels from strategic oil reserves — the largest coordinated release in history.

How Does This Affect Australia's Fuel Supply?

Here's the uncomfortable truth: Australia is heavily dependent on imported fuel. Our domestic oil production peaked back in 2000 and has been declining ever since. Today, Australia imports the vast majority of its refined petrol, diesel, and jet fuel.

We're down to just two oil refineries — Ampol's Lytton refinery in Brisbane and Viva Energy's refinery in Geelong. These facilities can only meet a fraction of our national demand. The rest arrives on tankers, many of which typically travel through or are affected by Middle Eastern shipping routes.

How much fuel does Australia have left?

This is the question on everyone's mind. Australia has historically held relatively low fuel reserves compared to other developed nations. The IEA recommends that member countries maintain at least 90 days of net oil imports in strategic reserves. Australia has struggled to consistently meet this benchmark, typically sitting well below it.

The federal government's Fuel Security Services Payment program, introduced in recent years to keep our remaining refineries operational, was designed to bolster domestic supply. But with global oil flows severely disrupted, even these measures face pressure.

The good news is that not all of Australia's fuel comes through the Strait of Hormuz. We source crude oil and refined products from a range of countries, including Singapore, South Korea, Japan, and the United States. However, the global price of oil affects everyone — even suppliers outside the Middle East raise their prices in response to a supply shock of this magnitude.

Will Australia Run Out of Fuel?

Let's address the big question directly: will Australia run out of fuel? In the short term, a complete fuel dry-up is unlikely. Australia does have domestic reserves, contractual supply arrangements with refiners in the Asia-Pacific region, and the IEA's record stockpile release is designed to cushion the blow.

However, "unlikely to run out" is very different from "business as usual." Here's what Australians should realistically expect:

Higher prices at the bowser — Crude oil prices have surged nearly 5% in recent days, with Brent crude climbing sharply. Goldman Sachs has raised its oil price forecasts, and Iran has warned the world to prepare for oil at US$200 a barrel. These increases flow directly to the pump.
Spot shortages in some areas — Regional and remote communities that rely on less frequent fuel deliveries may see temporary supply gaps, especially if panic buying continues.
Flow-on effects — Higher fuel costs don't just mean expensive petrol. They push up the price of everything that gets transported — groceries, building materials, online orders. Air New Zealand has already cut over 1,100 flights due to surging jet fuel costs.

Panic Buying Is Making It Worse

If you've driven past a servo recently and seen queues stretching down the block, you've witnessed the panic buying effect firsthand. And here's the thing — panic buying creates the very shortage people are afraid of.

Australia's fuel distribution system is designed to handle normal, steady demand. When everyone rushes to fill up at once, it overwhelms local supply chains. Tanker trucks can only make so many deliveries per day. The fuel is still coming in, but it can't be distributed fast enough when demand suddenly doubles or triples at individual stations.

During past disruptions, like the Colonial Pipeline cyberattack in the US in 2021, panic buying caused far more visible shortages than the actual supply issue. The same dynamic is playing out here.

What you can do instead

Don't fill up unless you need to. If you've got half a tank or more, you're fine for now.
Avoid topping up jerry cans. Hoarding fuel at home is a fire risk and it takes supply away from people who genuinely need it.
Use Fuel Snoop to find the best prices. When prices spike, the difference between servos can be massive — sometimes 30 to 40 cents per litre. Check our fuel map to find the cheapest petrol near you before you head out.
Time your fill-ups wisely. Understanding the petrol price cycle can still help you save, even in a volatile market.

The Strait of Hormuz: Why One Waterway Matters So Much

To understand why this crisis is so significant, you need to appreciate just how much of the world's energy flows through the Strait of Hormuz. Before the current blockade, around 15 million barrels of oil per day transited the strait. That's roughly a fifth of all global oil consumption.

The alternative routes — onshore pipelines through Saudi Arabia and the UAE — can handle a maximum of about 3 million barrels per day. That leaves a gap of 12 million barrels daily that simply can't be rerouted. All LNG from Qatar, one of the world's biggest exporters, must pass through the strait by ship. There's no pipeline alternative.

This is why the IEA's emergency release of 400 million barrels, while unprecedented, has been described by analysts as "only a band-aid on a gaping supply shock." It buys time, but it doesn't solve the underlying disruption.

What's the Australian Government Doing?

The Australian Government has been monitoring the situation closely. Key responses include:

Coordination with the IEA on the record strategic reserves release, with Australia contributing its share.
Engagement with regional suppliers in Singapore and South Korea to secure alternative fuel shipments.
Monitoring of domestic reserves and distribution networks to identify any emerging pinch points.
Maintaining the Fuel Security Services Payment to keep the Lytton and Geelong refineries operating at capacity.

The ACCC continues to monitor retail fuel prices to ensure that price increases reflect genuine market movements rather than opportunistic gouging. If you see prices that seem unreasonable, you can report them.

How to Save on Fuel During the Crisis

With prices climbing, every cent counts. Here are practical steps to reduce your fuel bill right now:

Compare prices before you fill up. Prices can vary dramatically between stations, even on the same street. Check our fuel map to find the cheapest nearby option.
Drive efficiently. Smooth acceleration, maintaining a steady speed, and avoiding unnecessary idling can reduce fuel consumption by up to 20%. Read our top 10 ways to save on fuel for more tips.
Remove excess weight. Roof racks, heavy items in the boot, and unnecessary cargo all increase fuel consumption.
Consider your trips. Combine errands into a single outing rather than making multiple short trips throughout the day.
Check the price cycle. In major cities like Sydney, Melbourne, Brisbane, Adelaide, and Perth, the petrol price cycle still operates. Filling up at the bottom of the cycle can save you significantly.

What Happens Next?

The situation remains fluid. The US has indicated that the Navy may escort oil tankers through the Strait of Hormuz, but Iranian mines and ongoing attacks on vessels make this a risky proposition. Diplomatic efforts are underway, but a resolution isn't imminent.

For Australian drivers, the key takeaway is this: fuel isn't about to disappear entirely, but prices are going to remain elevated for some time. The best thing you can do is stay calm, avoid panic buying, and use tools like Fuel Snoop to make sure you're not paying more than you need to.