Six fuel tankers bound for Australia cancelled as Iran blockade disrupts supply chain

SYDNEY — Six fuel tankers scheduled to deliver oil to Australia next month have been cancelled or deferred, Energy Minister Chris Bowen confirmed on Sunday, as the war in Iran continues to disrupt global supply chains.

The cancellations affect six of approximately 81 ships expected to arrive between mid-April and mid-May. Bowen said importers had already secured replacement shipments from alternative sources.

Some of those have already been replaced by the importers and refiners with other sources. That gives us some context of what we are dealing with, that's not to say it isn't a very challenged environment internationally.

— Chris Bowen, Energy Minister

The ships were scheduled to arrive from Malaysia, Singapore and South Korea. All three countries rely on refined products from Asian refineries that source crude oil through the Strait of Hormuz.

Bowen did not rule out further cancellations in coming weeks. He warned Australians to expect supply disruptions as the conflict enters its fourth week with no clear end in sight.

Supply routes rerouted through Gulf of Mexico

Iran's blockade of the Strait of Hormuz has removed approximately 20 per cent of global oil supply from the market. The waterway previously carried 20 million barrels of crude oil and oil products per day, making it the single most important chokepoint for global energy trade.

The closure has been described as the largest disruption to energy supply since the 1970s oil crisis. Oil prices crossed US$100 per barrel on 8 March 2026 for the first time in four years, rising to US$126 per barrel at the peak.

China and Thailand have already banned fuel exports to protect domestic supply. The export bans have cut off two of Australia's largest sources of refined fuel, forcing importers to look further afield.

ExxonMobil, BP and Vitol are now shipping record volumes of oil to Australia from the Gulf of Mexico to fill the gap left by Asian refineries. Ship trackers show fuel tankers travelling to Australia via the longer, more expensive route from the Americas rather than through traditional Asian supply channels.

The voyage from the Gulf of Mexico to Australian ports takes approximately 35 days, compared to 10-14 days from Singapore or South Korea. The longer route adds significantly to transport costs, which are being passed on to consumers at the pump.

Reserves at 38 days for petrol

Australia currently holds 38 days' worth of petrol reserves, with 30 days each of diesel and jet fuel. Fresh supply continues to arrive at Australian ports.

The two domestic refineries, Ampol Lytton in Brisbane and Viva Energy Geelong in Victoria, are operating at full capacity. Together they supply less than 20 per cent of national demand. The rest arrives by ship.

Australia's refining capacity has declined steadily over the past two decades. In 2003, the country had seven operating refineries. By 2026, only two remain. The closures have left Australia almost entirely dependent on imported refined fuels.

The government tapped the strategic oil reserve last week, releasing six days' worth of supply in an attempt to ease regional shortages. It also temporarily lifted environmental regulations to allow higher-sulphur fuel to be sold domestically rather than exported.

Bowen said the government was not contemplating fuel rationing.

"We're a long way from that," Bowen told ABC Insiders. "If we've got, at this point 74 of the 80 ships arriving over April and May, I can understand if people think all the ships are coming now and one day they will all stop, in one go. That is highly unlikely to be the case. It is much more likely there will be bumps in supply."

Industry warns of vulnerability

Australian Institute of Petroleum chief executive Malcolm Roberts said the country remained exposed to international supply disruptions.

"Australians are very vulnerable if major supplying countries decided to stop or restrict exports," Roberts said. "Australia is at the end of a very long global supply chain."

Roberts noted that 18 tankers had arrived so far in March, with 33 more scheduled. No members of his organisation had reported unfulfilled contracts to date.

The industry body has previously warned that Australia's fuel reserves fall well short of the 90-day stockholding obligation recommended by the International Energy Agency. Australia is the only IEA member nation not to meet the 90-day target.

Prices to stay elevated

The supply disruption has driven global oil prices above US$126 per barrel, the highest level in four years. Petrol and diesel prices in Australia have risen accordingly, with metropolitan unleaded reaching $2.40 per litre in some areas.

Regional areas have been hit harder. Some service stations in rural New South Wales ran dry last week due to panic buying, though the government attributed the shortages to demand spikes rather than supply constraints.

Treasurer Jim Chalmers said last week the government expected prices would not return to pre-conflict levels this year. If the conflict becomes protracted, elevated prices could persist for up to three years.

The ACCC has opened an investigation into alleged price gouging by major fuel suppliers. The competition regulator is examining whether some retailers have raised prices beyond what supply costs justify.

Prime Minister Anthony Albanese convened a virtual meeting of state and territory leaders on Wednesday to discuss fuel supply coordination. The government announced a new National Fuel Supply Taskforce to manage the response.

Bowen urged Australians to buy only the fuel they needed, attributing regional supply issues to demand spikes rather than supply shortages.

The next scheduled review of supply conditions is set for mid-April when the government expects to have clearer visibility on May shipments.