Is the fuel crisis over? Why experts say we may face a new crunch

Thursday, 4 June 2026

Fuel supply has stabilised - diesel prices are around $3.10 a litre down from a peak of $3.90 in mid-April - but some say we should not get too comfortable.

The Ministry of Business, Innovation and Employment’s fuel update this week said petrol, diesel and jet fuel was getting into the country smoothly.

Westpac chief economist Kelly Eckhold said while the US and Iran attempted to strike a deal, the world was running down its oil inventories and refined products.

Analysis by large investment banks indicated that inventory levels could be running very low by late July, with some predictions saying oil could rise to as high as US$150 a barrel.

Four months after the fuel crisis began, New Zealand appears to have entered a “new normal”. But experts warn that hard times could still be ahead.

When the conflict began in Iran in late February, a cluster of petrol stations around New Zealand ran dry.

Motorists who found there was nothing left at the pump then rushed to the nearest station, quickly depleting their tanks as well.

“It was the toilet paper effect,” said Greg Pert, director of fuel logistics company Tranzliquid, referring to the panic-buying which took place in the early stages of the Covid-19 pandemic.

“Once you get one or two pumps running out, the public think there’s a shortage so they just go and congregate to the next site and drain that one.”

Tranzliquid supplies petrol stations, in particular independent operators like Gull and Waitomo. It took the company several weeks to replenish their clients with their allocated fuel.

After the initial surge, Pert said fuel supply had stabilised with no further shortages. Confident that there were no further disruptions on the horizon, his company has not made preparations for New Zealand moving to Phase 2 or 3 of the fuel response.

“I’m a total optimist,” he said. “It’s all settled down, and listening to our operators, things have found a new norm, people are getting on with it and New Zealand seems to be holding up reasonably well.”

Four months since the US-Iran war started, the fuel crisis has disappeared from front pages in New Zealand. Diesel is now around $3.10 a litre, down from a peak of $3.90 in mid-April (but still well up from $1.95 before the crisis). Unleaded 91 is down to about $3.26 from a peak of $3.50.

The Ministry of Business, Innovation and Employment’s fuel update this week said petrol, diesel and jet fuel was getting into the country smoothly, stocks remained above minimum requirements, and resupply ships were arriving regularly. New orders were confirmed until the end of July.

Declines in fuel stocks (there are currently no ships with diesel on board within New Zealand waters) were part of normal variation expected during a conflict, MBIE said. And more diesel storage has just come online at Marsden Point in Northland.

But some say we should not get too comfortable. There are several factors which show that the risk of another crisis remains, especially as attempts to reopen the Strait of Hormuz - through which about 20% of the world’s oil supply passed before the conflict began - continue to falter. And some forecasts have highlighted a possible crunch point at the end of July.

“I think [consumers] should still be concerned,” Westpac chief economist Kelly Eckhold told Stuff.

“The reason that they have been able to feel a bit more comfortable is that we’ve been using buffers in the system. Anyone would realise that we can’t just run down the buffers all the time because we will eventually run out.”

While the US and Iran attempted to strike a deal, the world was still running down its oil inventories and refined products, Eckhold said. Japan’s inventory was down by around 20% and there were hints that China’s stocks were also down. Major oil companies have said they do not think it is sustainable to keep depleting these resources at the same rate.

“We’re very much into unchartered territory over the next two months if something doesn’t change,” Eckhold said. His view is shared by other commentators and sectors.

Analysis by large investment banks indicated that inventory levels could be running very low by late July. Some predictions have said that if this occurs without any mitigations, oil could rise to as high as US$150 a barrel. (The price of oil was about US$96 a barrel on Wednesday, compared to US$60-70 pre conflict.)

Ian Twomey, a Wellington-based energy consultant, said he was confident this would not be the case.

“People are still saying ‘this is temporary, it’s going to get worse’. The market pricing doesn’t tell you that. Product for July is now pretty well secured. There is no crisis.

“Something else would have to happen - we’d have to see a massive escalation in the Middle East, which would be a lot more bombs being thrown around, attacks on facilities and that sort of thing. In other words, you’re into a new situation.”

Twomey said there had been “severe stress” in the markets in late March and early April, but the supply chains had now reorganised themselves.

A MBIE spokesperson said New Zealand’s fuel stocks remained healthy and fuel importers had reported no issues accessing fuel - albeit at higher prices.

“Officials meet with New Zealand’s importers regularly to understand any emerging issues. They have provided good confidence through confirmed orders to July, with planned orders extending well into August.”

While many households in New Zealand have absorbed higher prices at the pump, lower-income families are not able to.

Budgeting advisor David Verry, from Auckland, told Stuff that he was starting to see clients using buy-now-pay-later schemes for petrol.

“We know that they really are in a horrible financial position. They end up on what we call the hamster wheel, and suddenly they end up with higher repayments than what their weekly fuel bill would be.”

Verry said they were now advising clients to cut out any unnecessary travel. That meant only using vehicles for school pickups or medical appointments.

“We tell them they really have to stop doing any driving that’s discretionary, that isn’t absolutely necessary.”