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In this episode of DBrief, Louise McGrath and Jeff Wilson from the Australian Industry Group discuss how the conflict in Iran is disrupting liquid fuel supply, international freight, and critical industrial inputs across the Australian economy.
 
They unpack why Australia can have adequate national fuel stocks while regional communities still experience empty bowsers and caps at the pump. The conversation explores how refinery slowdowns in Asia, rising global fuel prices and periods of panic buying are exposing vulnerabilities in Australia’s heavily import‑dependent fuel system. Louise and Jeff also examine the emerging flow‑on effects for plastics, fertilisers, copper, electrical products, packaging and other essential materials that Australian manufacturers rely on.
 
With shipping costs surging, insurers withdrawing cover for Middle East–exposed cargo, and force majeure notices becoming more common, they consider how these pressures may hit construction, food and beverage, agriculture and export‑oriented industries in the months ahead. Even minor shortages in items like PVC pipe or vegetable oils risk cascading into larger delays at building sites, factories and farms.
 
Drawing on lessons from the pandemic, Louise and Jeff highlight the importance of national coordination, clear information flows, and deep visibility into supply chains - as well as the practical steps businesses can take now to prepare for further volatility. They also look at what role government can play in ensuring calm, consistent and well‑informed responses as this global shock continues to unfold.

Key takeaways

• Australia’s overall fuel availability remains stable, but regional shortages are appearing due to market structure, independent retailers and panic‑driven demand spikes.
• Asia’s refinery disruptions - stemming from reduced crude flows from the Gulf - are lifting fuel prices and tightening supply for Australia, which imports around 90% of refined liquid fuels.
• Higher diesel and petrol costs are already flowing into freight, domestic transport and grocery supply chains, adding to existing inflationary pressures.
• Air freight and shipping rates are rising sharply, with reported increases of 40–70%, along with rerouting delays, congestion and insurance withdrawals for cargo linked to the Middle East.
• Force majeure notices and production stoppages offshore are affecting plastics, PVC resin, fertilisers, electrical products, metals and other inputs - with the construction sector likely to feel the impact by May.
• Even small shortages in critical items can trigger broader delays across construction, agriculture, food manufacturing and export industries.
• Businesses should map their supply chains, maintain close communication with suppliers and customers, and explore alternative sourcing options.
• Government measures so far include adjusting fuel quality standards and supporting supply chain coordination, but longer‑term discussions about sovereign capability and national preparedness are likely to grow.

Further information and resources:

• For the latest available statistics on fuel stocks held in Australia under the Minimum Stockholding Obligation click here. 
• See the DCCEEW's factsheet on Australia's Fuel Security during the Middle East conflict click here.
• Australian Industry Group is monitoring the evolving impacts of the conflict in the Middle East on Australia's fuel supply and broader supply chains. Read more.

Contact the Industry Development & Policy team here.