Iran strikes hit petrol prices, travel and NZ exports, PM says ‘wait and see’ the extent

Monday, 2 March 2026

Motorists can expect to feel the impact of events in Iran at the pumps.

Prime Minister Christopher Luxon says “we’ll have to wait and see” what impacts the turmoil in the Middle East will have on New Zealand’s economy.

He described the initial market reaction to the ongoing US and Israeli strikes on Iran and counter-strikes from Iran as “fairly muted”.

However, it is widely expected Kiwis can expect to pay more for petrol and ASB is warning of a risk to inflation.

The movement of people and freight to and from New Zealand is being affected by the closure of airports in the Middle East and threats to shipping, including in the Red Sea.

The Customs Brokers and Freight Forwarders Federation said its members were already seeing “significant operational disruptions across both air and sea freight”.

Oil prices rose sharply when market trading began in the US, on Monday afternoon New Zealand time, with the international benchmark Brent oil spiking 9% and West Texas Intermediate, the US benchmark, advancing 7%.

The spike took Brent close to US$80 a barrel, and West Texas Intermediate to above US$72.50 a barrel.

Prices eased in early afternoon trading, New Zealand time, shedding about half those gains. But Reuters reported some market-watchers were speculating the price of oil could rise as high as US$100 a barrel on the back of the conflict.

Iran is the world’s fourth largest oil producer and not only supplies the likes of India and China, but also controls a vital shipping lane for oil through the Strait of Hormuz.

About 15 million barrels of crude oil per day — about 20% of the world’s oil — are shipped through the strait.

The eight countries that comprise the Opec+ oil cartel have agreed to boost production of crude by 206,000 barrels per day to ease supply fears.

Iran exports about 1.6 million barrels of oil a day, mostly to China, which may need to look elsewhere for supply if Iran’s exports are disrupted ‒ another factor that could increase energy prices.

Aircraft park up at Auckland as Air NZ offers ‘flexibility’

Emirates and Qatar Airways flights to and from New Zealand have been suspended. A spokesperson for Auckland Airport said it was supporting the airlines with “aircraft parking and operational assistance”.

Currently, one Qatar Airways 777 and two Emirates A380s were parked at the airport, they said.

Other international flights were operating as scheduled, they said.

Air New Zealand doesn’t fly to the Middle-East, but a spokesperson said customers booked on tickets it had issued involving travel on partner airlines through the region up to and including March 8, were being given “added flexibility”.

“They can change their travel to a date within the next seven days or reroute to avoid transiting the Middle East, with no penalty, service fee or fare difference.

“Customers who no longer wish to travel can instead hold the full value of their ticket as credit,” they said.

Broad impact on financial markets possible

While the oil price spike is expected to trickle down to New Zealand petrol pumps, local investors will also be watching their KiwiSaver statements closely, given that geopolitical uncertainty and impacts on key commodities including oil depress sentiment.

“Usually you see stocks drop, so I wouldn't be surprised if people were looking at some of the investments they might have — their KiwiSaver balances … you might see a bit of red ink coming through there,” Infometrics chief executive and principal economist Brad Olsen said.

The Reserve Bank made only brief mention of events in Iran in its February monetary policy statement.

“The world is more frightening than it was a couple of days ago. You’re going to see a shift towards less risky assets, that run for safety around gold, probably the Japanese yen, maybe the US dollar.”

Defence stocks could lift.

“The US has just used for the first time one-way effective suicide drones, that’s a piece of kit they hadn’t used before,” Olsen said.

The NZX Top 50 Index opened down about 1% this morning as investors began to react to the developments overseas, and remained down about 1% in lunchtime trading. The Australian Top 200 Index opened down about 0.5% when trading on the ASX commenced at noon (NZT).

Motorists haven’t been quick to panic

AA policy adviser Terry Collins said an increase of US$10 in the price of a barrel of oil would equate to a price rise of about 10 cents a litre for petrol, diesel and jet fuel in New Zealand.

“It would be a wise idea to fill your car up, but you shouldn’t have to rush out today,” Collins said.

A Z Energy spokesperson would not comment on whether it expected to raise prices, by how much or when. Traffic to its petrol stations was running at a normal level on Monday, indicating no panic buying.

Z was confident in its ability to maintain safe, secure and reliable supply customers, he said.

As part of Australia’s Ampol Group, Z benefited from “a diversified and resilient supply chain, supported by refining capability, multiple international sourcing options, and robust critical infrastructure”, he said.

BP and Mobil have also been approached for comment.

Threats to inflation, OCR if conflict drags

Oil products make up about 6% of the consumer price index, meaning significant impacts can have a material impact on inflation and potentially the Official Cash Rate if sustained over time. Threats to the movement of freight carry a similar risk.

New Zealand’s trade with Europe is being disrupted by the threat of hostilities spreading to the Red Sea.

The Reserve Bank noted in last month’s monetary policy statement that rising geopolitical tensions and protests in Iran had contributed to higher global oil prices since January.

But it only made two brief mentions of Iran in the statement and did not speculate about the implications of a conflict.

ASB senior economist Kim Mundy said it was “wary for what this may mean for the near-term outlook for inflation”.

“It remains too early to make any concrete calls, but the risks are clearly skewed to the upside,” she said.

The price of gold, which had already topped US$5200 (NZ$8735) an ounce, rose a further 2.5% to trade at US$5380 at lunchtime on Monday.

ANZ chief economist Sharon Zollner said that for markets, energy prices were always key.

“This could be anything from a four-day war to a four-year one. There’s a very wide range of potential outcomes here,” she said.

“If it doesn’t last long, then it’s not an issue. But if it starts to look like the movement of oil around the world will be constrained for a meaningful period of time, then potentially you're in a different state of the world.”

Collins said Belgium’s seizure of another of Russia’s “black fleet” tankers over the weekend could add further impetus to the price of oil.

But he made clear the AA did not believe it would be reasonable for petrol companies to raise prices at the pump immediately, given the fuel they were selling now would have been refined and imported from oil bought at least weeks ago.

Importers, exporters already reporting impacts

A significant amount of New Zealand’s passenger and air freight traffic has shifted to transit the Middle East over the past two decades, due to the expansion of Emirates and Qatar Airlines.

But hubs in Dubai and Qatar have been temporarily closed, complicating air travel to and from New Zealand for both Kiwis and tourists. Terminal 3 at Dubai was damaged by an Iranian strike on Sunday.

Customs Brokers and Freight Forwarders Federation chief executive Sherelle Kennelly said several Middle Eastern countries had closed their airspace or imposed heavily restrictions.

“Time-sensitive exports such as horticulture, seafood, and high-value perishables may experience delays,” she said.

Companies that shipped freight by sea were also already experiencing disruptions, she said.

“Heightened security risks in the Red Sea, Bab el-Mandeb Strait, and Strait of Hormuz have led to some suspended sailings.”

Some vessels were being re-routed around the Cape of Good Hope, affecting transit times, fuel usage, and operational costs, she said.

“Freight costs may fluctuate due to longer voyages, war-risk insurance, contingency surcharges, and potential demurrage [penalties].”

Kennelly emphasised the level of disruption would be heavily dependent on how long the threat to air and sea travel persisted.