Australian motorists could be spared fuel price rises as tensions in Iran simmer
Australian motorists are being urged not to panic after the price of crude oil rose in recent days on the back of the geopolitical tensions in the Middle East.
Motorists in Australia could be spared from the worst of the fallout from the Middle-East, even as the price of the commodity surges.
Futures markets for Brent oil have spiked in recent days and are now buying $US75 a barrel, when it was just over $US65 this time last week.
It comes as tensions out of the Middle East flare up, after Israel undertook preâ€'emptive attacks on Iran.
It said the strikes were aimed at eliminating Iran's nuclear program and ballistic missile capabilities, but the fears in the market are based on what Iran will do in response.
If it hits neighbouring oilfields or blocks the Strait of Hormuz, through which 20 per cent of the world's oil supplies are shipped, the price of the commodity could skyrocket.
But NRMA spokesman Peter Khoury said every time there were geopolitical tensions in the Middle East, there was an initial knee jerk reaction from the market before it stabilised.
He said Australian motorists should remain calm.
'What we are seeing here is an initial reaction to what has happened in the last few hours in Iran, but this is not uncommon,' he told NewsWire.
'Until you see those increases rise and they start occurring in the Asian markets then Australian motorists shouldn't be panicking.'
Mr Khoury said currently there were no issues that there will be supply issues.
'It is important that it is put into context – we get our oil from Asia, we get our refined fuel from Asia, so there's no need to panic,' he said.
AMP chief economist Shane Oliver wrote in his latest note fuel prices could be on the rise, but it would need the price of oil to remain elevated.
'Oil prices were already rising this month on signs of increasing risks and have spiked further – with the rise so far this month threatening a flow of around 12 cents a litre for Australian petrol prices if sustained at these levels,' he said.
Swissoquote Bank senior analyst Ipek Ozkardeskaya said the price of oil would either rise or fall depending on Iran's response.
'One scenario is de-escalation, which could bring oil back below $US70 per barrel, around the 200-day moving average, shifting the market's attention back to supply-demand dynamics, trade disruptions, and renewed pressure on Russian oil,' she wrote in an economic note.
'The other scenario is broader escalation, potentially pushing oil prices toward $US90 –$100 per barrel – hopefully only temporarily.'
Dr Oliver said the flow on impacts from this could see inflation spike over the short term.
'While petrol prices could spike on the latest Israel/Iran conflict, the RBA is likely to look through any boost to inflation as temporary and focus more on any drag to growth.'
Despite the rise in costs, Dr Oliver reminded motorists the price of crude oil had just gone back to levels it was this time last year.
He also believes subdued consumer confidence, weak business conditions and easing inflation would all add to a case for a rate cut.
'Following the weak March quarter GDP data our base case is for 0.25 per cent rate cuts in July, August, November and February taking the cash rate to 2.85 per cent.
The money market sees about an 88 per cent chance of a 0.25 per cent cut in July and just over three cuts by year end.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
an hour ago
- News.com.au
Australia's property shift: Units now outperforming houses
Apartments are now outperforming houses in price growth across most of Australia's capital cities — but Melbourne buyers aren't convinced. A major new report from Hotspotting and Nuestar has flipped Australia's long-held property logic, revealing unit prices are now rising faster than house prices in the majority of capital city markets, driven by affordability pressures, soaring rents and shifting buyer psychology. The analysis shows 62.9 per cent of apartment markets in capital city council areas recorded equal or higher median price growth than houses in the year to May 2025. 'I'd be locked out': Mum's $65k home warning Brisbane led the charge, with 76.3 per cent of its apartment markets outperforming houses. Perth followed closely with 75 per cent, and Sydney wasn't far behind at 71.4 per cent. Hotspotting founder Terry Ryder said the old rule that houses on land always delivered superior capital gains no longer held true. 'The once-dominant paradigm is simply no longer the case,' Mr Ryder said. 'The demand for apartments is being driven by affordability, lifestyle preferences and higher rental yields. And that's showing up in the numbers.' Nuestar founder Michael Wilkins said buyers today were more value-conscious and lifestyle-focused than ever before, and quality apartment design was lifting performance. 'The quality of today's new apartments is worlds apart from the cookie-cutter blocks of 10 years ago,' Mr Wilkins said. 'Buyers want smart floorplans, integrated amenities and access to transport, and that's what's driving performance.' Across Australia, 154,928 apartments were sold over the past 12 months, a number experts expect will continue to grow into 2025. But in Melbourne, the apartment resurgence has failed to land. MR Advocacy director and buyers agent Madeleine Roberts said local demand remained heavily skewed toward houses and villa units, with the inner-city apartment market still burdened by longstanding stigma. 'We're definitely not seeing that trend in Melbourne,' Ms Roberts said. 'Apartments here, particularly in Docklands and the CBD, have underperformed for years. They just don't offer the same growth potential.' While lower prices appealed to some buyers, Ms Roberts said most were still opting to move further from the city in exchange for land. 'We've always been a city that values space,' she said. 'Apartments might be cheaper, but they're not seen as a stepping stone, more like a compromise.' The MR Advocacy director said her firm hadn't bought a single inner-Melbourne apartment on behalf of a client in recent months, instead steering buyers towards villa units and townhouses in Melbourne's middle-ring and outer suburbs. 'There are still good-quality apartments out there, but not all stock is equal,' Ms Roberts said. 'You've got to be careful. Some of these buildings come with high body corporate fees, low growth, and difficult resale.' Ms Roberts said rentvesting was emerging as a smarter strategy for younger buyers. 'Buy where the numbers work, rent where the lifestyle works,' she said. 'It's often cheaper to rent an apartment than to own one here, and you can still build equity elsewhere.' In Brisbane, the apartment surge is already well underway. McGrath Wynnum-Manly principal Gaby McEwan said the unit market had roared back to life, driven by downsizers, first-home buyers and investors. 'We've absorbed that oversupply of apartments we had back in 2014 to 2016,' Ms McEwan said. 'Now we're in a completely different market. There's real scarcity, and real demand.' Ms McEwan said buyers who had been priced out of detached houses were now turning to low-maintenance apartments and two-bedroom townhouses in lifestyle-rich suburbs. 'Two cousins I know recently bought a townhouse on Charlotte St in Wynnum for $710,000,' she said. 'They're rentvesting and know the value's only going up. That's the kind of mindset we're seeing.' The McGrath Wynnum-Manly director said luxury apartments were also in high demand from retirees, but a lack of downsizer-friendly stock and high entry prices were stalling many transitions. 'We've got retirees trying to simplify their lives and move into modern apartments,' Ms McEwan said. 'But some of these new builds start at $1.8m and go as high as $2.3m. In many cases, that's more than what their current house is worth.' She added that without stronger downsizer incentives, many older Australians were staying in large, ageing homes longer than they wanted to — or should. 'I've seen people in their 70s, 80s and even 90s still living in high-maintenance properties, some won't move until they have a fall and it's too late,' Ms McEwan said. 'There's a real housing gap here, and it's hurting the most vulnerable.'
News.com.au
an hour ago
- News.com.au
Australia's first green hydrogen refuelling station opens in Geelong
Australia's first hydrogen refuelling station has opened in Geelong, setting the stage for the regional city to be serviced by hydrogen-powered and emission-free heavy vehicles. The renewable facility is the first of its kind in the country and also offers fast charging for commercial electric vehicles. Deputy Prime Minister and local member Richard Marles attended the launch of the station and said it represented 'the future'. 'This is a really significant step and actually, I think, a very memorable day in Australia's renewable energy story, but very much in Australia's hydrogen story,' said Mr Marles. 'Hydrogen is a great hope in terms of decarbonising the Australian economy and actually globally, dealing with the challenge of climate change. 'We are so well positioned as a nation, given our abundant renewable energy sources in solar and wind, but also because we're at the forefront of commercial long distance vehicle use, which is really one of the great applications of hydrogen as a commercial fuel.' He said the new refuelling station was 'so important' and the government was looking forward to further use of hydrogen in commercial transport. Viva Energy chief strategy officer Lachlan Pfeiffer said it marked a change in Australia's efforts to reduce emissions and make a more sustainable heavy transport sector. 'Offering hydrogen refuelling alongside fast charging for commercial EV vehicles – and the potential for renewable diesel in the future – is recognition that we believe the pathway to net zero will require a mix of new fuels and technologies alongside traditional offerings,' he said. The station will be capable of dispensing at least 300kg of hydrogen every two hours, which Viva said would give a similar experience to filling up a diesel engine. It should be capable of refuelling at least 10 trucks at once. The project will use renewable electricity to generate green hydrogen, using recycled water from the nearby Barwon Water Northern Water Plant. Barwon Water managing director Shaun Cumming said the facility would help decarbonise its vehicle fleet. 'We're excited to work with Viva Energy and the other vehicle operators on an innovative project that could deliver lasting benefits for the region and beyond.' Viva said the scale of hydrogen production in the region meant there would be capacity to sell it onwards to other commercial customers.
News.com.au
2 hours ago
- News.com.au
Airline experts rank Qantas the world's safest airline
Qantas has been crowned the world's safest airline, with its pilots considered the best trained, most disciplined and most professional in the industry. In a study conducted by and analysing 142 airline carriers across the globe, Qantas was named the leader for airline safety. Editor-in-chief Geoffrey Thomas said the airline's safety performance was 'unmatched'. 'According to independent audits, Qantas pilots are considered the best trained, most disciplined and most professional in the industry,' he said. 'The airline has led nearly every significant operational safety advance over the past 60 years.' The second-safest airline, according to the study, was Qatar Airways, followed by Air New Zealand, Cathay Pacific Airways and Emirates. Virgin Australia was named the sixth safest airline in the line-up, with Jetstar named the second-safest low-cost airline. HK Express was named the leader in the top five low-cost airline groups, followed by Jetstar Group, easyJet, Ryanair and AirAsia Group. 'Unlike traditional safety assessments that rely on certification check boxes, uses a dynamic, data-driven methodology,' he said. 'We track real-world safety outcomes and update our rankings daily.'
