A narrow stretch of water off Iran is one of the most important trade routes on Earth. Here’s why the Strait of Hormuz matters, and how trouble there reaches Australian petrol stations.
The Strait of Hormuz is a narrow channel between Iran to the north and Oman to the south. It connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
At its narrowest point, it is only about 33 kilometres wide, and the shipping lanes used by tankers are much narrower still.
It matters because some of the world’s biggest energy producers, including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Qatar and Iran, sit inside the Gulf. Before 2026, about 20 million barrels of oil a day passed through the strait, roughly a fifth of global oil consumption. Qatar’s huge exports of liquefied natural gas also go through it.
There are only limited ways around it. Saudi Arabia and the UAE have pipelines that can bypass the strait, but they can carry only a fraction of normal shipments.
What happened in 2026
Iran has long threatened to close the strait if it came under attack. After the U.S. and Israel launched strikes on Iran on 28 February 2026, Iranian forces warned ships away, attacked vessels and laid mines, and traffic collapsed.
The U.S. has since imposed a naval blockade on Iranian ports, and attempts at ceasefires and peace deals have repeatedly broken down. Shipping data from the IMF’s PortWatch has recorded only a handful of transits on some days in October, compared with around 85 a day before the crisis.
Oil prices have swung sharply as a result. Brent crude rose above US$100 a barrel in March for the first time in four years, and was above US$110 in late October.
Why it matters to Australia
Australia relies on imports for most of the fuel it uses, after the closure of most of its oil refineries. Only two remain, at Geelong and Brisbane. Much of the petrol, diesel and jet fuel Australia imports comes from refineries in Asia, including Singapore, South Korea and Malaysia, which depend heavily on oil from the Middle East.
When supply through Hormuz is disrupted, Asian fuel prices rise, and that flows through to the bowser here within weeks. Higher fuel costs also push up the price of freight, flights and groceries, adding to inflation, which is one of the factors the Reserve Bank weighs when setting interest rates.
The crisis has renewed debate about Australia’s fuel security. International Energy Agency members are expected to hold fuel stocks equal to 90 days of net imports, and Australia has long held well below that level.
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