How Trump’s attack on Iran will hit Kiwi wallets
Monday, 2 March 2026
New Zealand is nowhere near the Middle East front lines.
But if oil stops flowing through the Strait of Hormuz, the impact will land here fast — at the petrol pump, in supermarket aisles, and in your KiwiSaver balance.
“Iran has made it clear that they will fight, are making trouble across the broader Middle East and have pretty much closed the Strait of Hormuz,” says Kōura Wealth founder Rupert Carlyon.
The narrow waterway between Iran and Oman, serves as the only exit for oil from the Persian Gulf. If it’s blocked, global supply tightens — and prices spike.
New Zealand doesn’t produce its own oil, which means we pay whatever the global market decides.
First hit: petrol
Markets move on headlines. Even the threat of disruption can send oil prices higher, says Hamilton Hindin Greene adviser Jeremy Sullivan.
And when oil jumps, petrol follows.
But what does this actually mean for the average household?
The maths is simple when looking at how much the average family spends on fuel a week.
If a household uses 50 litres of petrol per week (common for a two-car household):
A 10c rise in petrol prices will equate to $5 extra a week
A 30c rise in petrol prices will equate to $15 extra a week
A 50c rise in petrol prices will equate to $25 extra a week.
Rural families or those with longer commuting times will be hit even harder.
If a household uses 80 litres of petrol per week (common for those commuting longer distances):
A 10c rise in petrol prices will equate to $8 extra a week
A 30c rise in petrol prices will equate to $24 extra a week
A 50c rise in petrol prices will equate to $40 extra a week.
Rising petrol prices don’t stop at the price we pay at the pump, with the impact trickling throughout our economy.
A tax on our economy
Dr Murat Ungor, a senior lecturer in economics at the University of Otago, says higher global energy and shipping costs affect the price of everything we import.
“This functions as an effective tax on our economy, raising costs across virtually all sectors,” he says.
The impact will vary depending on how reliant the sector is on fuel costs and global trade routes.
Airlines face immediate pressure — jet fuel is one of their biggest costs. After posting a $59m loss last week, Air New Zealand could do without another oil shock.
Manufacturers importing parts. Retailers shipping goods. Exporters moving product offshore.
If their costs rise, so do ours.
That’s inflation pressure — just when the Reserve Bank is trying to contain it.
A weaker dollar
Over the weekend, we already saw the New Zealand dollar weaken against the greenback (US dollar).
According to Craigs Investment director Mark Lister, this is to be expected as investors move their money to safer assets.
“We’ll see money move from those higher risk trades, like shares, into lower risk trades like treasury bonds, gold and the US dollar,” says Lister.
“All of your higher risk currencies, like the Kiwi dollar and the Aussie dollar, will come down a bit.”
This actually creates a double hit, given that oil is traded in US dollars. If the New Zealand dollar comes down at the same time the oil price rises, then we are actually paying a higher premium than what the US dollar price might indicate on the tin.
If this situation persists, it can put significant pressure on the prices we pay for imported goods here in New Zealand.
Lister doesn’t expect an immediate shift in the Official Cash Rate. But if higher oil prices stick around, it complicates the Reserve Bank’s inflation fight.
At this stage, Lister doesn’t expect the Reserve Bank to make any sudden changes to its OCR strategy. Any changes to the OCR or our mortgage rates will likely be contingent on how long the war in the Middle East lasts and what impact this has on international trade and our economy.
KiwiSaver balances set to slide
KiwiSaver funds — especially growth funds — are heavily exposed to global equities.
When investors rush to safety, share markets usually dip first.
Balances may fall in the short term. But history suggests shocks don’t last forever.
Ungor does, however, note that markets tend to be resilient after the initial shock of a major geopolitical event.
“The 1990-91 Gulf War, 9/11 attacks, and various Middle Eastern conflicts have all created temporary market disruptions followed by recovery as uncertainty resolves and economic fundamentals reassert themselves,” Ungor says.
The most important consideration, he says, is ensuring your KiwiSaver fund aligns with your time horizon to retirement.
“If you’re decades away from accessing your funds, short-term volatility is an inevitable part of long-term wealth accumulation.”
How concerned are you about what this war could do to your weekly budget or New Zealand’s economy? Let us know in the comments section below.