Fuel Crisis Australia: Strait of Hormuz closure effects cannot be fully predicted, Energy Minister Chris Bowen warns
Energy Minister Chris Bowen has warned Australians of months-long effects due to the closure of the Strait of Hormuz.
The long term effects of oil and gas shortages from the Middle East “can’t 100 per cent be predicted” the Energy Minister has warned, as the major Middle Eastern oil producers promise to increase output.
Speaking at the end of an Easter long weekend which saw fuel demand up as much as 30 per cent, Energy Minister Chris Bowen said reopening the Strait of Hormuz would not immediately solve fuel shortages.
“Even if the Strait of Hormuz opens tomorrow, there’s going to be impacts for quite a while for the world to recover,” he told Sunrise.
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By continuing you agree to our Terms and Privacy Policy.“There’s been gas fields and production facilities bombed. They take five years to rebuild, for example. So there’s going to be some impact.”
The sooner the Strait opened, the sooner the international economy would settle and fuel prices would normalise, Mr Bowen said.
“But every bit of delay means that tail, that tail is going to be there for quite a while and maybe show itself in ways that can’t 100 per cent be predicted.”
A downed US airman was located and extracted in a high-risk overnight operation after ejecting in Iran, as Iranian forces mounted a large manhunt and US special forces carried out a covert rescue under fire.
Donald Trump made a wild online post overnight Australian time, calling for the vital Strait of Hormuz shipping lane to be opened and also threatening to attack civilian infrastructure.
“Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran,” he posted on his Truth social platform.
“There will be nothing like it!!! Open the F***in’ Strait, you crazy bastards, or you’ll be living in Hell - JUST WATCH! Praise be to Allah. President DONALD J. TRUMP.”
Closure of the Strait has cut oil exports for Saudi Arabia, the UAE, Kuwait and Iraq; members of the OPEC+ oil-producing alliance.
On Sunday, OPEC agreed to increase oil output quotas by 206,000 barrels per day for May - a move which is symbolic given the major exporters are stymied by the Strait’s closure.
But OPEC+ sources told Reuters the output lift was a signal of readiness for once the waterway reopened.
Oil prices are at a four-year high at about $US120 a barrel, inflating transport costs for oil able to get out of the Middle East. JP Morgan forecasts prices could hit $US150 if the Strait stays close to mid-May.
The effect of the uncertainty in Australia is a huge spike in demand for diesel, particularly during springtime on arable farms.
The oil refinery at Geelong, owned by Viva Energy, saw a 30 per cent increase in sales for the Wednesday and Thursday before Easter compared to the same days last year, Mr Bowen said.
While diesel demand remains high, petrol demand is normalising, Mr Bowen says.
Shortages have been particularly acute in NSW, where on Friday 182 service stations were out of diesel, and 48 were totally dry. On Sunday, 145 stations were without diesel, the Minister said, with fulsome national figures expected later on Monday.
“That’s big progress,” he said of the increased refilling of service station tanks.
Originally published as Strait of Hormuz closure effects cannot be fully predicted, Energy Minister warns
