Drivers urged not to panic buy as fuel price hikes nowhere near record high

Lead

Australian motorists are being urged not to panic buy fuel as oil prices jumped to over US$100 a barrel following renewed tensions in the Middle East, with peak motoring bodies saying prices remain far below April's record highs.

The spike comes after Yemen's Houthi rebels struck two Saudi vessels in the Red Sea, a key route for Saudi oil exports, and as the United States announced it would position itself as the 'guardian of the Hormuz Strait.'

Coverage Comparison

ABC Australia reports that the price of oil has risen dramatically over the past 24 hours, with West Texas Intermediate (WTI) crude rising 5 per cent immediately after US President Donald Trump's announcement on his Truth Social page that the US would be known as 'the guardian of the Hormuz Strait.' By midday, trade in Asia saw WTI gain a further 1.4 per cent to US$79.28. Brent crude is now up roughly 10 per cent to US$84.19.

In a separate report, ABC Australia notes that oil jumped past US$100 a barrel after renewed bombing began between Iran and the United States near the Strait of Hormuz. The reports together indicate conflicting figures on the exact price level, but both point to a sharp upward movement tied to Middle East tensions.

The NRMA's spokesperson Peter Khoury said prices had already started to creep upwards. "The average price for unleaded nationally has now gone up to $1.85. It's gone up just under 3 cents in the last 24 hours," Mr Khoury said. "Diesel's gone up to $2.26 on average. It's gone up about 4 or 5 cents."

He stressed that prices are nowhere near the record highs seen in April, when the average for unleaded was $2.50 and diesel was $3.27. "So based on those numbers, things would need to get pretty catastrophic to get back there again," he said.

Meanwhile, the Royal Automobile Club of Queensland (RACQ) is not concerned about the latest oil price surge, according to ABC Australia.

Key Claims

• Oil prices jumped to over US$100 a barrel.
• Yemen's Houthi rebels struck two Saudi vessels in the Red Sea.
• The average price for unleaded nationally has gone up to $1.85.
• Diesel's gone up to $2.26 on average.
• NRMA is not forecasting prices to go as high as they were in April.
• US President Donald Trump announced the US would be known as 'the guardian of the Hormuz Strait.'
• The price of West Texas Intermediate (WTI) crude oil rose 5 per cent.
• Brent crude is now up roughly 10 per cent.
• The Royal Automobile Club of Queensland (RACQ) is not concerned about the latest oil price surge.

Context

The price of oil had fallen in recent weeks to levels not seen since before the Iran war began, helped by the signing of a Memorandum of Understanding (MOU) between the US and Iran. However, Middle East analyst Will Todman said the MOU was "deliberately vague," allowing both sides to interpret it as they wished, which led to the breakdown. The price of oil began moving up late last week as Iran announced it was closing the Strait of Hormuz, a waterway through which roughly 20 per cent of the world's oil and gas supplies flow.

Mr Khoury said price increases would have a "profound" effect, as significant price jumps could have an "immediate inflationary impact on the economy." "It's not at the levels we saw in April, and we certainly hope we don't get anywhere near that, but what we do know is that petrol has a major impact on the family budget," he said. He also noted the federal government's 16 cents per litre excise on wholesale fuel, halved from 32 cents, as a factor in current prices.