Iran's Strait of Hormuz Closure Spikes Fuel Costs in Oceania

The ongoing conflict involving Iran has caused significant economic instability in Australia and New Zealand following the closure of the Strait of Hormuz. Iranian attacks on hostile targets and efforts to bar United States ships from the waterway have pushed Brent crude prices toward $84 a barrel, triggering a global price shock.

Australia spent A$33 billion on crude oil and processed fuel imports in the four months since the conflict began, a cost increase of over 70% compared to the same period in 2025. To mitigate these costs, the Parliament of Australia implemented a temporary tax cut, though the measure has since ended. Both Australia and New Zealand have seen their central banks hike interest rates to combat the resulting inflation.

New Zealand has faced particularly acute distress due to its lack of local refineries and reserves. The country saw unemployment reach an 11-year high in the second quarter as businesses struggled with fuel costs. In response, the New Zealand Government provided cash handouts to needy citizens to assist with gasoline purchases. Meanwhile, the Government of Oman has been involved in negotiations with Tehran regarding access to the critical waterway.