AAA<\/p>\n
If the international oil trade has an oracle it is Daniel Yergin, the author and analyst who won a Pulitzer prize for his sweeping history of the modern oil industry, The Prize: The Epic Quest for Oil, Money and Power.<\/p>\n
He took his title from Winston Churchill, who as first lord of admiralty in the years leading up to WWI had converted the Royal Navy from a fleet driven by coal, of which Britain had abundant supplies, to one powered by oil, which lay beneath Persian sands. This was a mad gamble at the time.<\/p>\n
\u201cTo commit the navy irrevocably to oil was indeed to \u2018take arms against a sea of troubles\u2019,\u201d said Churchill, with Shakespearean flourish. Should it succeed though, British naval dominance would be assured. \u201cMastery itself was the prize of the venture,\u201d as he put it.<\/p>\n
![\"Author](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/72e81f8afc08e153f58bbbad786fbcc71bcdacd9.jpeg\")
Author and analyst Daniel Yergin predicts a \u2018nightmare\u2019 if the US-Iran persists for months rather than weeks.Bloomberg<\/p>\n
In the decades that followed, British and then American pursuit of oil would reshape what became Iran, which is now using the world\u2019s oil dependence as its most potent weapon against another wave of foreign aggression.<\/p>\n
This week Yergin was holding court at CERAWeek, the annual conference he founded that is now known as the \u201cDavos of Energy\u201d. There oil industry executives fretted over a spectre that Yergin had written about days earlier, that the \u201cnightmare scenario\u201d<\/a> of the prolonged closure of the Strait of Hormuz to the 20 per cent of global oil and gas supplies that flow though it might be upon them.<\/p>\n \u201cThe fear? That this will result in skyrocketing energy prices that send the world economy plummeting into a deep recession,\u201d wrote Yergin. Later he would tell Axios that the nightmare had not yet been fully realised. That would befall the world if the war \u201cpersists longer than weeks\u201d<\/a>.<\/p>\n It will be a month old on Saturday.<\/p>\n That Iran would and could close the strait was of little surprise to any armchair strategist on Earth, except apparently Donald Trump and his Secretary of War Pete Hegseth. After all, the world has watched flights of Iranian-made Shahed drones thrum over Ukraine to wreak havoc on energy infrastructure and cities alike since Russia\u2019s full-scale invasion in 2022.<\/p>\n Related Article With no warning of the attack to friends or allies, Trump had left world leaders with little to reassure their anxious populations as prices soared.<\/p>\n When should we panic?<\/p>\n As the violence drags on, Australians are demanding to know how their government plans not only to address the economic shock, but how it will maintain the most basic elements of our society \u2013 our personal mobility, our capacity to work, to grow and harvest food, to move it to our supermarkets.<\/p>\n \u201cFarmers can\u2019t farm, truckies can\u2019t truck, and miners can\u2019t mine,\u201d Opposition Leader Angus Taylor said to Albanese in question time on Thursday. What did the government plan to do it about?<\/p>\n On Friday, Albanese and Energy Minister Chris Bowen for the first time held a press conference together on the issue, seeking to calm nerves and stave off panic buying. They reiterated that every shipment of liquid fuel destined for Australia remains en route. There is as much liquid fuel in the nation today as there would have been in normal circumstances.<\/p>\n The six scheduled ships cancelled or deferred since the war began have been replaced and three additional shipments secured, they said, repeating earlier statements. In addition, six cargo loads of jet fuel were on their way to Australia, \u201cwhich is the normal level to be expected at this time, none of them have been cancelled\u201d, said Bowen.<\/p>\n \u201cThe government has always acknowledged there are real and unacceptable shortages in regional Australia, as the demand has spiked so much,\u201d he said, adding that he had tapped the national fuel reserve to increase supplies to the regions, the equivalent of around six days of national fuel use.<\/p>\n Bowen and Albanese stressed that Australia\u2019s role as a gas supplier was to the national benefit, particularly as Malaysia, which depends on Australian gas, had announced the night before that its tankers would be allowed to sail through the strait.<\/p>\n \u201cOur gas exports are very important in the region,\u201d said Albanese. \u201cAustralia is a reliable supplier. We expect reciprocation in our economic relations.\u201d<\/p>\n But as was made clear this week, the threat of a shortage is as bad as an actual one. As households and businesses stocked up over recent days many service stations ran dry, if only for short periods. Bowen had the figures at hand during question time in parliament on Thursday. That day 7 per cent of NSW service stations were without diesel and 2 per cent had no fuel at all, he said. In Victoria, the figures were 3 per cent and 4 per cent.<\/p>\n What Bowen and Albanese and their state colleagues have not explained so far is what they plan to do if the war bleeds on and supply remains tight. Will they ration access to fuel? If so, how, and when, and by how much? What are the trigger points? What should we be watching watch for?<\/p>\n The government does not yet have answers to some of those questions, though it may on Monday when the national cabinet gathers.<\/p>\n Preparing for that meeting, NSW Energy Minister Penny Sharpe told this masthead, \u201cThe local impacts of the war in the Middle East are currently cost and distribution, as supply remains steady. In our scenario planning, a key indicator will be the continued arrival of supply ships.\u201d<\/p>\n As this masthead reported earlier this week, constraints will bite deeper at the end of April when the Asian refineries that deliver 80 per cent of Australia\u2019s supply exhaust their inventories.<\/a> Speaking on 3AW during the week Victorian Energy Minister Lily D\u2019Ambrosio said both federal and state governments had powers to curtail fuel supply, but that it was crucial that they acted in concert.<\/p>\n \u201cIf we need to have other levers pulled over the coming weeks \u2026 it is really important that we have a national response. Fuel knows no boundaries. If a state acts alone and puts restrictions in place you could find the perverse outcome that fuel distributors take supply to another state.\u201d<\/p>\n COVID scar tissue<\/p>\n In the vacuum of information anger is rising at a prime minister with a reputation for abundant caution.<\/p>\n \u201cI don\u2019t think the government does urgency well, and I don\u2019t think they understand what a risk mitigation strategy is all about \u2026 that is, planning for the inevitable,\u201d the Independent Food Distributors Australia chief executive Richard Forbes told Sky News<\/a>.<\/p>\n Unsurprisingly, former treasurer Wayne Swan, who along with former Labor prime minister Kevin Rudd crafted the famously fast and bold national response to the global financial crisis of 2008, is more sympathetic.<\/p>\n People, he says, are demanding simple answers to complex questions and misinformation is spreading fast. Political populism, social media, and scar tissue among voters to COVID measures have made governing during crisis far harder, he says.<\/p>\n \u201cIn the GFC, people were recognising it was a complex problem. No one knew where it was going. But at the moment, there\u2019s no room for anyone to say that.\u201d<\/p>\n Even when a plan is finalised, it may well be that governments chose to withhold critical information. After all, says Swan, signalling when measures to curtail fuel sales might kick in may only exacerbate panic.<\/p>\n In the meantime, the market itself is doing its brutal work.<\/p>\n \u201cAs much as it may not be pleasant, sky-high prices are telling consumers and businesses that if you really want to use petrol or diesel, then you\u2019re going to pay through the nose for it,\u201d this masthead\u2019s senior economic correspondent, Shane Wright, wrote on Thursday<\/a>, using the sort of plain talk that prompts allergic responses among politicians. \u201cIt\u2019s telling people who believe that 4X4 utes the size of small countries are their god-given right that there are cheaper-to-run alternatives, be they smaller fuel-powered cars or EVs.\u201d<\/p>\n Measures in, measures out<\/p>\n This week Bowen declared that a national fuel emergency response plan extracted from the government under freedom of information laws by the former crossbench senator Rex Patrick was out of date. Instead, reporters asking what measures the government might consider were pointed to a list of measures laid out by the International Energy Agency, whose executive director, Fatih Birol, happened to be visiting Australia this week, telling ABC television that the world was facing the greatest energy crisis in history,<\/a> with 11 million barrels a day drained from supply.<\/p>\n The IEA\u2019s suite of measures that governments might use to cut fuel consumption include everything from encouraging working from home to reducing highway speed limits, to backing EV adoption. Bowen and Albanese have so far ruled out the former and celebrated progress on the latter. \u201cI don\u2019t think there is anyone out there today who has bought an electric vehicle who\u2019s regretting the decision at this point in time,\u201d Albanese said on Friday.<\/p>\n Chaotic signalling from the White House has not made the Albanese government\u2019s messaging or planning any easier. During a US cabinet meeting on Thursday, Trump\u2019s special envoy, Steve Witkoff, said the president\u2019s \u201cpreference is always peace and that we should make that our priority\u201d, while Hegseth declared the United States would continue \u201cnegotiating with bombs\u201d.<\/p>\n \u201cI have no idea what they are trying to do,\u201d Politico quoted an Asian diplomat<\/a> as saying after the meeting.<\/p>\n Whatever happens next, there is universal agreement that prices will not fall at once even if the war ends soon. Gas infrastructure in the region has been damaged and the gap in the oil supply cannot be plugged quickly. With storage facilities full, production has been stifled and the 11 million barrels of oil Birrol refers to cannot be suddenly magicked into the market.<\/p>\n \u201cPrices rise like a rocket, fall like a feather,\u201d Mark Zandi, the chief economist for Moody\u2019s Analytics told The New York Times<\/a>.<\/p>\n Greg Bourne was a young drilling engineer working for BP in the Gulf in 1973 when he witnessed the first oil shock. He went on to work closely with Lord John Browne of Madingley, the chief executive who tried and failed to have the company diversify into renewables. Bourne went on to serve as an energy advisor to Margaret Thatcher, before forging a second career as a member of the pro-renewables Climate Council in Australia.<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/4977e5e9e96b8bc14714fbadc9b28e61ff708140.jpeg\")
<\/a><\/p>\n![\"Truck](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/59f045411cf5626884e5f1d5ca1c925c51a64fcd.jpeg\")
Truck owners like Chris Gibbs, shown here filling up one of his vehicles, are facing uncertainty.Louise Kennerley<\/p>\n![\"Prime](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/1023dda4e2ec1e5b3ff2cb6fc7e7279a7144564d.jpeg\")
Prime Minister Anthony Albanese and Minister for Energy Chris Bowen fronted the media on Friday.Alex Ellinghausen<\/p>\n![\"Australians](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/b65d1829264ab394ad45690cefe7eee6ba6c6f01.jpeg\")
Australians carry the scars of the pandemic.Steven Siewert<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/182082a728d675aa7d638fcedefa135076ca5001.jpeg\")
The market is going about its brutal business.Audrey Richardson<\/p>\n
![\"Driving](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/5c6a394123fb9ba21a070b08b761d0e1942dd8cd.jpeg\")
<\/a><\/p>\n