Labor open to extending fuel tax discount as the Middle East spirals back into conflict, oil prices surge

The Albanese government is leaving the door open to further extending the fuel excise discount as fighting between the US and Iran again spikes global oil prices.

Crude saw its biggest single-day price jump since 2020 after US President Donald Trump announced overnight he was reinstating the blockade on Iran, with Brent surging 9.6 per cent to $US83.30 a barrel.

The spike comes two weeks before the fuel tax is set to revert to 52.6 cent per litre after a temporary discount introduced in March.

“I think the Treasurer has been pretty clear that we’ll continue to monitor the situation,” Emergency Management Minister Kristy McBain told ABC’s Radio National.

“We’ve extended that obviously until the end of this month and we’ll monitor the situation and see what else needs to be done.”

She also said the global oil market had proven more resilient than many thought.

“I think we’ve seen countries work together pretty constructively, as well as a range of industry players, to divert fuel supplies around a whole bunch of different waterways,” Ms McBain said.

“We haven’t seen the crisis escalate as perhaps everyone thought it might.

“But I think it is really important that shipping continues to be free wherever it goes and make sure that there isn’t any adverse outcomes to people who are ultimately ferrying these ships around.”

At the weekend, Iran declared it was closing the Strait of Hormuz in response to US strikes that “rendered futile” months of peace talks.

The announcement was met with fury from the White House, with Mr Trump ordering heavy strikes and a resumption of the blockade on Iran’s ports.

“At 4.45pm. ET today, US Central Command began launching the third consecutive night of strikes against Iran, at the Commander in Chief’s direction,” the US’ regional command said.

“These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz.”

Mr Trump has also proposed a 20 per cent levy on all cargoes travelling through the Strait of Hormuz in exchange for safe passage.

A spokesperson for Foreign Minister Penny Wong told NewsWire the government backed freedom of navigation.

“We’ve been clear for some time that we do not want to see further escalation,” they said.

“We want to see a return to the ceasefire and for the US and Iran to continue negotiations.

“For that to happen, Iran must ensure safe passage through the Strait of Hormuz and cease its attacks on commercial shipping.

“Australia and the world needs the Strait open and for freedom of navigation to be restored.”

Opposition frontbencher Dan Tehan echoed the government’s line, saying that “any long-term strategy or plan which would start to see international waterways tolled would be very alarming”.

“We obviously need to hear more about whether this is now an official US government policy, whether it’s part of some sort of negotiation tactic to try and get Iran to properly free the waterway and allow international passage, especially of oil, through it,” he told ABC radio.

“So we’ll have to wait and see what developments take place.”

If Mr Trump followed through with the idea, Mr Tehan said Anthony Albanese should make the case to Washington to abandon it.

this then led to a further escalation of these types of tolling across the world,” Mr Tehan said.

“The government I’m sure would have the strong support of the opposition in … presenting the case that it’s absolutely essential that these waterways remain free from any sort of toll system of any one country dictating the terms of passage, because that would set a dangerous precedent right across the world,” Mr Tehan said.