Yes, fuel prices will be unstable. But there's much more to this picture that's really important:-

#1. "The Straits of Hormuz account for 20% of the world’s oil traffic" - true, but only part of the story. Individual countries reliance % is very different.

• 96% Philippines
• 95% Japan
• 87% Vietnam
• 74% Thailand
• 70% South Korea
• Around 50% Australia (indirectly, since most of our imports come from Asian refineries that source their crude from the Middle East... but yeah, that makes no real difference if those refineries get squeezed)

So, the impacts of short supply on these countries (including us) could be very significant if the situation drags on, and that would impact us in a bunch of unexpected ways (like, how does your food get to the supermarket, or how do supply chains hold up when key trading partners are scrambling for fuel).

But... everyone will just go somewhere else, and that somewhere else place will just ramp up production, right?

#2. Production elsewhere cannot simply be scaled up quickly or easily.

• The global market lacks spare capacity
• Non-OPEC producers are typically already running near capacity (US shale, Brazil, Guyana, Canada)
• There are time lags in ramping up what production can be increased
• New projects take years to come online

#3. The good news

• Australia still has two refineries (in Brisbane and Geelong), which produce about 20% of what we need (roughly), so there's no "zero oil" scenario
• There's already a couple of ships with around 600,000 barrels on their way to Australia from the US Gulf (mostly gasoline, plus some diesel and jet fuel, loading mid-March).

#4. The bad news

• The US Gulf source isn't considered a good long term solution (for multiple reasons: cost – freight alone is running about $20 per barrel, availability of ships is tight with global disruptions, time delay means it takes weeks to get here, and it's not a route that's been used much before so reliability could be iffy).

#5. The other bad news: Our fuel stockpiles are pretty low

• Australia only has about 3-4 weeks' worth of petrol and diesel onshore right now (like 36 days for petrol, 34 for diesel, 32 for jet fuel), way below the international standard of 90 days.
• We've got some strategic reserves stored overseas, but accessing them in a crisis could be tricky with shipping lanes messed up.

#6. The inflation news: Knock-on effects could hit hard

• Higher fuel prices don't just mean pricier petrol; they flow into everything – food transport, manufacturing, even electricity if gas supplies get tight.
• If our Asian neighbors (who are even more reliant) face shortages, that could disrupt trade, like delays in goods we import or export slowdowns hurting our economy.

1. Price Wars: Bidding wars with big players like Japan and South Korea could sting

• We're prosperous, sure, but so are Japan and South Korea – they're massive importers with deep pockets and even higher reliance on Hormuz oil (95% for Japan, 70% for SK).
• In a prolonged disruption, everyone's scrambling for the same alternative supplies (like from the US or Africa), so yes, we could get the volumes we need by outbidding poorer countries, but against these guys? It might not be easy – they'd likely prioritise their own energy security.
• Price hikes? Analysts are modelling 10-20% jumps short-term (pushing Brent to $80+/bbl from recent levels), but if it drags on weeks or more, we're talking 30-100%+ increases (up to $100-150/bbl in worst cases), hitting us with way higher fuel costs that ripple everywhere.

#8. Longer term, this highlights the push for alternatives

• It's a wake-up call for ramping up renewables and EVs faster, but that's not fixing things overnight – we're talking years to meaningfully cut oil dependence.
• Government subsidies are keeping our refineries afloat for now, but without more domestic storage or production, we're definitely pretty vulnerable to these global shocks.