Willis says we have a 52-day fuel buffer. The numbers aren’t as clear-cut

Tuesday, 17 March 2026

Thirteen ships en route to New Zealand will give us a buffer for fuel supply, but it’s not as steadfast as we might think.

If shipments through the Strait of Hormuz stay blocked, economists say the disruption could start affecting fuel supplies in New Zealand by late April.

Independent economist Cameron Bagrie explains New Zealand consumes around 24 million litres of fuel every day across diesel, aviation, and petrol.

A ship will typically carry between 50 million and 100 million litres of fuel, so the country needs at least three of those smaller tankers every seven days just to break even.

Based on the latest numbers we’ve seen, New Zealand has 30 days' worth of fuel onshore and another 22 to 23 days on the water.

But Bagrie notes that this 53-day buffer only exists if the supply of ships delivering fuel remains uninterrupted.

'The real choke point is only just coming,” says Bagrie, noting that the ships currently on the water represent past production.

“If there's less crude that's flowed up to those refineries, then their ability to meet demand is going to be curtailed.'

The real issue of supply will only manifest later in April if the Strait of Hormuz remains impassable due to the ongoing war in Iran.

We import most of our refined fuel products from Singapore and South Korea.

Westpac chief economist Kelly Eckhold notes that New Zealand has a preferential arrangement with Singapore for refined fuels.

This means that New Zealand would be entitled to earlier access than other countries across Southeast Asia.

The problem, however, is that Singapore has already lost access to 70% of its crude oil imports (due to the closure of the Strait of Hormuz). If Singapore has no access to oil, then it won’t have anything to refine.

South Korea is similarly heavily reliant on the Persian Gulf for access to oil, and the country’s Government has already started talking about an export ban in a bid to prioritise local industry.

Here’s where New Zealand’s 53-day buffer starts to look a little more wobbly.

According to Eckhold, it typically takes about a month for crude oil to travel from the Persian Gulf to the refineries in Asia, from which New Zealand imports oil.

It then takes a further 16 to 22 days for the tankers to carry the refined product from the refineries to New Zealand.

You’re talking about a supply chain that’s running on a 52-day cycle, which means that lags will only start to become apparent to end consumers down the line.

By late March, countries like Singapore and Korea will start to face internal pressure on how much they should be exporting versus keeping for their own industries.

As Bagrie says: “You'd imagine there will be a very strong desire for meeting local needs… self-interest will dominate group interest.”

What this means for Kiwis

There are three different types of fuel that we rely on to keep our wheels moving, our planes in the air, and our industries ticking along: petrol, diesel and jet fuel. The fate of each of these fuels has different repercussions for Kiwis.

Most of us have so far focused on petrol – largely because of the rising cost at the pumps.

But petrol supply is actually the easiest to stretch out, provided we don’t see the toilet paper effect taking hold.

“If people are hoarding, then your local consumption of the product will be more than 24 million litres a day,” says Bagrie.

Through work-from-home measures or by limiting the amount sold at petrol stations on a daily basis, the Government could quite effectively stretch out the supply of petrol if needed.

Diesel is more complicated.

“The critical fuel is diesel,” says Bagrie.

“If the shit hits the fan, then goods can’t get from A to B. We consume about 20% more diesel than petrol.”

Diesel is what keeps the supply chain in New Zealand moving along, which makes it difficult to defer consumption.

Diesel is the workhorse of our economy. If supply is squeezed or rationed, this will mean products don’t reach our shelves as quickly as they usually do, which will, in turn, lead to pricing pressure on anything that has to be moved in a truck.

Lettuce, tomatoes, bread, meat and dairy products will all face inflationary pressure.

Willis says the worst-case scenario forecasts inflation as high as roughly 3.7% for later this year. That, she says, puts us in a better position than Australia is today – but that will mean little to Kiwis trying to rebuild their wealth after what has been a tough economic period.

Jet fuel is, in some ways, the canary in the coal mine.

When people ask whether fuel rationing is really possible, the correct answer is that it’s already happening.

Air New Zealand’s decision to cut back 1100 flights also has the effect of stretching out supply.

Korea is our biggest supplier of jet fuel, and the country has already implemented a cap on how much jet fuel leaves its borders.

“Koreans refiners can continue to export, but they shouldn't export a volume greater than they did in the same week or month of the year before,” says Eckhold.

Eckhold tells me that when he heard the Government was going to make an announcement, he expected to hear instructions for us to start working from home.

That hasn’t happened yet, but as we start to eat further into that buffer, rationing measures begin to look more likely.