Melbourne drivers face petrol price pain as Iran crisis jolts oil markets
Sydney Morning Herald
by Nick Toscano, Mike FoleyMarch 2, 2026
AI-Generated Deep Dive Summary
Melbourne drivers are grappling with rising petrol prices as tensions in Iran disrupt global oil markets. The conflict between Iran and US-allied countries has sent shockwaves through energy supplies, pushing crude oil prices up by over 10% in a single day. This surge could translate to significant increases at the pump, with economists estimating that every $US10 rise in oil prices adds about 10 cents per litre to fuel costs in Australia. While current prices in Melbourne and Sydney are already high—exceeding $2.00 per litre for regular unleaded—the full impact of the crisis may not be felt for up to two weeks.
The situation is driven by concerns over the Strait of Hormuz, a critical shipping lane through which one-fifth of global oil and liquefied natural gas passes. Shipping activity has slowed significantly, with tanker flows reduced to a trickle. Experts warn that if trade through this chokepoint isn’t restored quickly, oil prices could climb past $US100 per barrel—marking the highest level in years. Such a scenario would have far-reaching consequences for global energy markets and economies worldwide.
In Australia, household energy bills could rise due to increased costs of natural gas, which is used for heating, cooking, and power generation. Since 2015, when Australia began exporting liquefied natural gas (LNG), local gas prices have been tied to international markets, meaning global fluctuations directly impact Australian consumers. This linkage underscores the vulnerability of the domestic energy sector to geopolitical tensions.
Analysts predict that if the conflict escalates further, oil prices could double, potentially reaching $US150 per barrel. Such a dramatic increase would likely lead to stock market declines and severe economic disruption. However,
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Originally published on Sydney Morning Herald on 3/2/2026