Petrol and diesel prices in Australia have climbed to their highest average levels since April amid doubts over whether Iran and the United States will agree to a truce any time soon.
Regular unleaded averaged $2.37 a litre at service stations nationwide over the past week, up 10¢ a litre from the week earlier, according to new figures from the Australian Institute of Petroleum on Monday. Diesel rose even more sharply, increasing nearly 14¢ to $2.87 a litre.
The hikes come as the cost of crude oil, the resource that’s refined into petrol and diesel, remains elevated due to the war in the oil-rich Middle East, which is blocking millions of barrels of the commodity from reaching global markets every day. Last week, the price of Brent oil, the global crude benchmark, dropped below $US100 amid hopes of a diplomatic breakthrough.
But those hopes appeared to weaken as traders pushed prices higher to $US106 ($151) a barrel on Monday following reports that Iran is refusing to budge on certain conditions it is seeking before agreeing to reopen the Strait of Hormuz, a critical oil and gas shipping corridor off its southern coastline.
US–Iran peace talks were again at an “impasse”, said Vivek Dhar, the Commonwealth Bank’s head of energy and mining commodities research. “Iran said it would stick to its seven‑day proposal to reopen the Strait of Hormuz, alongside other demands that US President Trump has already rejected.”
Concerns over a recent wave of attacks on Saudi Arabian energy infrastructure by Yemen’s Iran-backed Houthi militants were also keeping oil and fuel prices elevated.
Despite the increases, average petrol and diesel prices at service stations across Australia were still below the record highs reached earlier in the conflict of $2.53 a litre for unleaded and $3.19 for diesel – levels that previously prompted Canberra to temporarily halve the fuel excise in April before reinstating the full rate in August.
However, shrinking global stockpiles of refined fuels and the prospect of the US government imposing a ban on American diesel exports are keeping analysts and Australian motoring groups on edge about the risk of further price pain to come.
In a bid to ease soaring US fuel prices before the country’s midterm elections, US President Donald Trump has said he is considering imposing a 90-day ban on diesel exports. “I’ve said let’s not send‌ out the diesel – we make a lot of diesel,” Trump said last week.
Analysts calculate that a US diesel ban, if enacted, risks sidelining roughly 20 per cent of global seaborne diesel trade, which would send Australia’s regional benchmark diesel prices “significantly higher”. Diesel is already in shorter supply globally following Ukrainian attacks that have severely crippled Russia’s oil-refining sector, which typically accounts for 4 per cent of the world’s capacity.
“Global diesel markets are already dealing with major disruptions to Russian and Middle Eastern exports,” Dhar said. “Both regions accounted for approximately 45 per cent of global diesel seaborne trade just before the Iran war started.”
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Nick Toscano is a business reporter for The Age and Sydney Morning Herald.Connect via X or email.From our partners
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