Working from home, protected diesel: Restrictions we could face if the oil crisis keeps going like it is
Thursday, 12 March 2026
New Zealand is in a race against time as the war in Iran continues to choke global oil supply.
MBIE data (updated four days ago), shows we had a 58-day supply of petrol, 50 days of diesel, and 47 days of jet fuel (meaning 43 days as of today).
More is on the way but, as Westpac chief economist Kelly Eckhold says, we may be down to 17-18 days of stock by the time it arrives.
He says the ships are currently in NZ’s Exclusive Economic Zone, which provides a high level of certainty that they will arrive.
Asked the exact location of the boats, a spokesperson from MBIE would not disclose the information, claiming it was “commercially sensitive.” Fuel companies have also expressed reluctance to comment on rising fuel prices. MBIE did, however, note that the fuel companies have reported no major disruption for their fuel supplies in transit to New Zealand.
Despite that, we’re already seeing the effects of the global pressure locally, with Air New Zealand cutting flights and petrol prices rising.
For the national carrier, it’s about cutting costs for the airline in response to the near-doubling of jet fuel prices, butalso rationing what’s available to ensure they can keep planes in the air.
Eckhold says we can expect to see flight prices rise further as the number of seats is reduced.
This will have broader ramifications, hitting GDP growth, hurting industry and reducing economic activity.
Air New Zealand is the first organisation to take a step like this, but it won’t be the last.
The attack on tankers in the Strait of Hormuz overnight, as well as the damage inflicted on a key refuelling port in the region, has intensified the pressure on supply.
The International Energy Agency has cleared the release of 400 million barrels of oil - the largest volume of emergency oil reserves in its history.
This may sound like a lot, but context is important.
Mark Smith, a senior economist at ASB, says that 400 million barrels of oil might only account for around 20 days of the normal oil flow transported through the Strait of Hormuz.
This is enough to feed global demand for approximately 3.8 days.
The global market knows this isn’t enough, and some countries have already started rationing.
Eckhold says China and Thailand have both banned the export of petroleum, while South Korea is pulling back on exports to ensure its expansive industry has enough.
South Korea is one of the key exporters of petroleum products to New Zealand. If they aren’t exporting as much as they were in the past, this will ultimately hurt us.
Eckhold says the Government has a committee that is actively discussing the crisis and its long-term implications.
If the war drags on, it may be necessary to incorporate measures to ensure that we don’t burn through our available fuel too fast.
'I would expect that if it really got that bad, they would have some sort of prioritisation scheme in place to be able to keep things going,' says Eckhold.
Both the agriculture and the transport sectors are heavy users and integral to keeping our economy moving. The Government will be hoping to minimise the impact on these industries if there’s an ongoing constraint on supply.
'If things don't resolve in a month or six weeks, [rationing/prioritisation] would strike me as a decent probability,' says Eckhold.
US President Donald Trump has repeatedly suggested the war will end soon, but he has given no specific timeline or indication of why he thinks that might be the case.
If the war does drag on, ordinary car users are most likely to be impacted, with Eckhold suggesting the Government could encourage working from home to reduce fuel use.
He also thinks that diesel access might be prioritised to protect the construction and agriculture sectors while also protecting supply chains to ensure goods can reach supermarkets.
While the Government weighs its options, the coming weeks will determine whether these measures remain a contingency plan or become the new, restrictive reality for an economy built on the assumption of easy movement.
Oil traders watching closely
The volatility in the market has also impacted the behaviour of oil traders.
“The oil market has become significantly more reactive and uncertain compared with just a few months ago,” says Michael Walker, the managing director of Blackbull Markets.
Traders are keeping a close eye on developments, with every fresh announcement potentially moving the market.
Some traders also see an opportunity in this.
Trading in oil products on Blackbull Markets has increased by around 286%, alongside a 32% rise in index trading.
Walker says this means traders are looking for opportunity amid the current uncertainty in the broader market.
The bottom line is that people watching the oil market closest think this is far from over.
“[There’s] potential for larger price swings ahead, and recent price movements show the market reacting more quickly to geopolitical developments,” says Walker.