The ongoing war in Iran has shut down the Strait of Hormuz, a critical chokepoint that handles roughly 20% of global oil and gas shipments.
The Ministry of Business, Innovation and Employment reported that, as of Sunday, New Zealand held 25 days’ worth of diesel supplies domestically, with another 29 days en route.
Mainfreight managing director Don Braid said New Zealanders should brace for price hikes on petrol, diesel, freight, and international travel in the weeks ahead.
In a conversation with Morning Report, he said he anticipated fuel price impacts emerging soon, which would ripple through to freight, passenger air travel, and any sector tied to fuel costs.
He noted significant disruptions to both air and sea freight.
“In terms of sea freight, whilst ports are operating within the area, we’re not seeing any vessels transiting through there … so that’s adding time to transit and in terms of cost as well.”
“Not so much as you would think for New Zealand and Australian exporters because we can route across Asia or, for that matter, across the USA; it’s for that freight that has to transit via the Middle East.”
Braid noted that diesel prices had already begun to rise.
“We are being told to expect further increases in terms of diesel, and that will be impacting our operations around the world; unfortunately, we will have to pass that through.”
When asked if he was confident in New Zealand’s fuel supply situation, Braid replied that the Marsden Point refinery’s closure had left the country dependent on imports from other nations.
“Jet fuel, I think, is 24 days that is being held currently; those are the things we wouldn’t want to see become an issue. So yes, it worries us, but we’ve been able to get through all sorts of other catastrophes and events of late, so we’ll have our fingers crossed and just get on and do the job,” he said.
“We are being told by those fuel companies that we shouldn’t worry about supplies, so therefore I don’t see a need for panic, but I do expect us to see an increase in pricing.”