Oil Crisis: Why Petrol Prices Are Surging in Australia (April 2026)

If you've filled up lately and thought the bowser was running hot, you're not imagining it. Petrol prices across Australia have jumped noticeably since late March 2026, and the reason is one of the most consequential oil chokepoints on the planet going haywire.

The Strait of Hormuz — a narrow, 39-kilometre-wide strip of water between Oman and Iran — handles roughly 20% of the world's oil supply. Tankers moving through it carry everything from Saudi Arabian crude to Iraqi exports to UAE gas liquids. When that flow gets disrupted, global oil markets panic. And when global oil markets panic, Australian drivers pay at the pump.

Here's what's happening, why it matters, and what you can actually do about it.

What's actually causing this

Escalating tensions involving Iran — including reported strikes and heightened military activity in and around the Persian Gulf — have put the Strait of Hormuz in the spotlight. Insurance costs for tankers transiting the area have spiked. Some shipping companies are rerouting vessels around the Cape of Good Hope (which adds 10-14 days and significant cost). The net effect: a measurable reduction in supply reaching global markets.

Global benchmark Brent crude spiked to over US$95/barrel in the first week of April — up from around US$78 in January. That's a 22% increase in raw oil cost before it even hits Australian shores.

The Australian Institute of Petroleum reported capital city average ULP 91 prices at $1.94/litre in early April, up from $1.71 in January. Sydney and Brisbane are among the hardest-hit capital cities, with someService stations approaching or exceeding $2.10/litre.

How this compares to previous oil crises

Let's be clear: this isn't 1973. We're not seeing the 400% price spikes that triggered the OPEC embargo. But we don't need a crisis that severe to feel real pain at the bowser.

For the average Australian driver doing 15,000km/year in a medium SUV (consumption around 10L/100km), that's 1,500 litres of petrol per year. At $2.00/litre versus $1.71, that's an extra $435/year. For a tradie doing 35,000km/year in a ute (14L/100km), it's roughly $1,000 extra per year. That's not trivial.

Use our Fuel Cost Calculator to see exactly what the current prices are costing you based on your actual annual kilometres.

The EV question is getting more urgent

This is the context that makes EV economics suddenly look a lot more attractive. When petrol is $1.71, the "is an EV worth it?" question is genuinely nuanced. At $2.00+, the numbers shift noticeably.

Here's the comparison: charging a standard EV at home on an off-peak overnight plan (roughly 18-22c/kWh in most capital cities) gives you a "fuel" cost equivalent of about 65-85 cents per litre of petrol equivalent. That's less than half the price of ULP 91 at current rates.

A driver doing 15,000km/year in an EV at off-peak electricity rates might spend $350-500 on "fuel" annually. The same distance in a petrol SUV at $2.00/litre costs $3,000. The EV is roughly $2,500/year cheaper on fuel alone — before you factor in registration savings, reduced maintenance, and the increasingly competitive purchase price of new EVs.

Our EV vs Petrol Calculator runs the full comparison including purchase price, fuel, maintenance, and registration over 5 years.

How to cut your fuel costs right now

You can't control global oil markets. But there are concrete things that genuinely reduce what you spend:

• Use a fuel price app. The difference between the cheapest and most expensive petrol in the same suburb can be 15-20 cents/litre. Apps like MotorMouth, 7-Eleven Fuel, and GasBuddy show real-time prices. Saving 15 cents/litre on a 50-litre fill-up is $7.50 saved per tank.
• Fill up at the right time of day. Prices vary across the day. Late afternoon is often the most expensive. Early morning can be cheaper.
• Combine your trips. Five short trips of 3km each uses more fuel than one 15km trip (cold starts use more fuel). Plan your week to batch errands.
• Check your tyre pressure. Under-inflated tyres increase fuel consumption by 3-5%. Properly inflated tyres are a free, easy win.
• Ease up on acceleration. Smooth driving uses noticeably less fuel. Hard acceleration and heavy braking are expensive habits.
• Consider switching to a hybrid. If an EV isn't feasible for you yet (long distances, no home charging), a hybrid still delivers 30-40% better fuel economy in urban driving.

Will prices come back down?

Possibly — but not quickly. Oil markets are notoriously volatile, and the Strait of Hormuz situation has introduced genuine uncertainty that won't resolve overnight. OPEC+ still has spare capacity it could release, and if tensions ease, prices could retreat. But the structural risk premium in oil markets has increased.

The Australian Competition and Consumer Commission (ACCC) monitors petrol prices and has previously intervened when retailers were deemed to be excessively profiteering during global price shocks. That's worth watching — if bowsers are charging significantly more than the import parity price, there's typically public pressure and sometimes regulatory attention.

The longer-term trajectory, however, is probably higher. The global energy transition is creating capital starvation in fossil fuel investment, which constrains supply. Even setting aside the current crisis, the era of cheap petrol may be behind us.

The bigger picture for Australian households

Fuel is one of those costs that ripples outward in ways people don't immediately notice. When diesel prices rise, that flows into freight costs — which flows into grocery prices. When petrol prices rise, disposable income shrinks, and consumer spending in other areas drops. The RBA will be watching fuel prices closely as it approaches its April meeting, since sustained high fuel prices push inflation up and complicate rate decisions.

For households on tight budgets, $400-600 extra per year on fuel is significant. It's the difference between a modest savings buffer and living pay cheque to pay cheque. That's not alarmist — it's just the math.

The good news: there are tools to take control of your fuel costs, and the EV transition is accelerating in a way that makes the long-term picture more manageable than the short-term pain. In the meantime, shop around, drive smoothly, and check those tyre pressures.