Fuel rationing a chance in Australia if war continues to trim global oil supplies, experts say

If widespread fuel rationing is introduced in Australia, will motorists and businesses be ready?

It is a question experts are asking.

They say Australia will face difficult logistical questions this year if the war in the Middle East is prolonged.

Peter Anderson has worked in fuel for decades.

The director of APCO, which has 30 petrol and service stations in some of Australia's south-eastern states, mainly in Victoria, has seen it all.

Two major oil crises in the 1970s. The invasion of Kuwait in the 1990s. The Russia-Ukraine war that erupted in 2022.

He was at the same petrol station in Geelong's north, where we met for this story, when fuel rationing was implemented in Australia in the late 1970s.

Back then, cars with number plates ending in an even number could buy fuel on one day, then those ending in an odd number the next day, under the rationing program.

"I remember all those days, the queue of odd-numbered cars out the front," he tells the ABC.

"We had trucks driving 24 hours a day in and out of the [nearby] refinery. We had offices here. I was actually sleeping in the offices."

Mr Anderson also ran an informal system for locals to keep the local economy running.

"I remember restricting the fuel to quite a lot of customers and keeping stocks for guys that were doing work, just to keep their businesses going," he says.

"They used to come and knock on the door, and I'd open up the bowser and give them a bit of diesel."

It is not something he would do now, and not something he sees happening again in 2026.

"I've been talking with suppliers, and they are assuring me that I'll continue to get my full allocation of fuel," he says.

He blames panic buying for the fuel crunch we have seen in Australia in recent weeks.

He says he would normally distribute 10 million litres a week, but last week he did more than 13 million litres.

"Sales have increased by about 40 per cent and it's going to put a real pressure on our stock that we hold in the ground," he said.

"With diesel, we're putting a truckload in, and by the time we turn around and go back, the truckload is gone the next day."

There will be fuel rationing, expert says

Professor Samantha Hepburn, who specialises in energy policy at the Deakin Law School, is concerned about where global events are heading.

According to the International Energy Agency (IEA), the war between the United States, Israel and Iran has created the largest supply disruption in the history of the global oil market.

It says that, in 2025, an average of 20 million barrels per day of crude oil and oil products passed through the Strait of Hormuz, or about 25 per cent of the world's seaborne oil trade.

But the war has seriously impeded oil flows through the Strait, and options to bypass it are limited.

In response, the 32 IEA member countries agreed last week to a large release of 400 million barrels of oil from their emergency reserves to try to stabilise global oil prices and guarantee supply, as a stopgap measure.

But with no end in sight for the war, Professor Hepburn sees the impact in simple terms: there is now far less fuel flowing around the world, and countries will have to adapt to that reality.

Unless the war ends quickly, we will run out of important slack in the global system.

"Our short-term buffer will obviously not survive," she says of the reality of any prolonged war, "and we're going to have to immediately switch to rationing".

Diesel has a vital role in Australia's transport, industry, emergency services and the military.

If supply issues worsen, experts say diesel would be the first fuel to see restrictions on purchasing because the military, essential services vehicles, transport services, and farmers would have to get priority.

The situation will be felt at the bowser, at first. But it will quickly expand, she says.

"A short-term buffer is not a realistic solution for these types of conflicts. Given the huge impact that this has on consumers and the prospect of inflation increasing, and the Reserve Bank increasing interest rates, this is a major concern moving forward, and it needs to be properly addressed," she says.

A failure to plan ahead, and panic buying needs to stop

Retired air vice-marshal John Blackburn agrees that Australians will have to adapt their behaviour if the Middle East war is prolonged.

"We will have to adjust our fuel consumption and how we do things in this country, a type of rationing, if the Middle East issue doesn't get resolved," he told the ABC.

"What we've got to do now is start to take measures to prepare if [the war] doesn't solve itself."

He said Australia's political leaders had failed for years to plan for a situation like this, and the fact that we only had two oil refineries left in the country was symptomatic of our failure to plan ahead.

"I have had people in the Department of Energy 10 years ago tell me they didn't care if we didn't have any refineries because it was cheaper to import refined fuel," he said.

"I did somewhat sarcastically ask that individual, 'Were they an economist?' and I tried to explain the difference between 'just in time' and 'just in case', because there was no concept of [fuel] security. The assumptions were huge."

He said politicians had to start explaining the reality of the global market to Australians, including the fact that we import 90 per cent of our fuel.

And he says recent panic buying of petrol and diesel in Australia had only made things worse, because our fuel system was not built for huge demand shocks like that.

"The reason we're running into problems is that people seeing what's happening in the Middle East are running around trying to buy extra stocks in case of interruption," he says.

"So in some areas, [there's been] about a 35 to 40 per cent increase in demand. Our system is not designed to do that.

"It's not a problem with the supply coming into the country at the moment or the processing; it's our behaviour that's causing the system itself to break down.

"We've got to stop panic buying," he says.

Fuel was still imported to Australia during wartime

Peter Khoury, NRMA's head of media, says that when officials talk about Australia having roughly "30 days of fuel" left, that figure is based on a scenario in which no fuel arrives in Australia from overseas, which is extremely unlikely.

"We cannot stress enough the reality that it's never happened before," he says.

"It is highly unlikely that tankers would ever stop crossing the Indian and Pacific oceans.

"If you picture what it was like in the earlier years of World War II, Nazi Germany had marched through Europe, Japan was on our doorstep with Darwin, even then, we had access to fuel," he says.

He says recent panic buying in Australia was sparked by fuel prices in our three biggest capital cities going up "a lot higher, and a lot quicker, than they should have".

He is encouraging motorists to return to their normal buying habits to reduce stress on the system.

"People started to see prices in the $2.30 and $2.40 range and went up and started stockpiling to the point where Bunnings ran out of jerry cans," he says.

"What we want to ensure is that at the terminal, one way or another, we're getting diesel out to regional service stations and to farming communities, because at the end of the day, we know there's enough fuel, but for whatever reason, shortages have hit regional areas," he says.

And he says the industry has made it clear there is still enough fuel coming into Australia, so there is nothing to suggest we will need to ration fuel at this point.

But he says the only way for the Strait of Hormuz to reopen is for the war to end.

"Our hope, and again, NRMA are not, you know, geopolitical experts, but like everybody else, our hope is the announcement [by the IEA] to release 400 million barrels will enable all parties to buy time to end the conflict one way or another," he says.

"But until the war ends, we're not going to see any meaningful relief at the bowser."