As many Australians prepare for the Labour Day long weekend, you might be watching the price at the fuel bowser with more trepidation than usual.

The crisis in the Middle East has caused global disruptions to energy and liquid fuel markets. And we are feeling it in Australia.

Shipping in the crucial Strait of Hormuz, the only sea passage from the oil-rich Persian Gulf to the open ocean, has come to a virtual standstill, sparking a global oil price rise of about 10%. And the risk of Middle Eastern energy infrastructure becoming military targets has also raised the prospect of reduced production.

So, what does this mean for Australia?

Australia imports roughly 90% of its liquid fuel (refined petrol and diesel). This means world crude oil prices have a direct impact on our pump prices.

In Australia, analysts say petrol prices could jump by around 40c a litre, meaning the cost of filling the tank would be about $24 for a 60 litre tank.

Airfares are also affected, because jet fuel is directly linked to crude oil prices. Prices could rise by 10–20%, and even more for long-haul international flights, which use more fuel.

Is Australia buffered from oil price spikes?

The short answer is no. As an importer of liquid fuel, Australia is highly susceptible to oil prices spikes, meaning global shocks flow directly to the pump.........

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