Iran War: How long could NZ keep the pumps running if fuel imports dried up?
Thursday, 12 March 2026
ANALYSIS: Few Kiwis will have experienced fuel running dry at the pump.
Some service stations ran out of petrol when the Auckland fuel pipeline broke in 2017 but it has been a long time since the “car-less days” prompted by the fuel crisis of the late 1970s.
The risk is more front-of-mind as a result of the turmoil in the Middle East.
Fuel may be flowing freely but, ominously, farmers in more remote regions in Australia have reported being unable to buy diesel.
Read more:
Shane Jones: What the Government is doing to secure NZ’s fuel supply amid Iran war
Iran war: Ministers to meet amidst report South Korea could halve NZ fuel supply
Australia’s Federal Energy Minister, Chris Bowen, put the blame squarely on panic buying, saying the country continued to hold good stocks of petrol, jet fuel and diesel.
“There has been a big spike in extra orders over and above contracts, spot orders if you like. And inevitably, when you’re seeing a huge increase in demand, [suppliers are] having trouble keeping up with that.”
Here, Finance Minister Nicola Willis is heading a ministerial group monitoring the potential fallout from the conflict in Iran.
One of the developments it is keeping an eye on is refineries across Asia, from which New Zealand secures almost all its fuel, declaring “force majeure” — in effect ‘a get-out-clause’ from contracts they have with buyers to supply them.
There are even reports South Korea has been considering blocking fuel exports.
“I’m mindful that the fuel companies who have been importing from South Korea have very long-standing relationships with those suppliers, and I imagine the suppliers themselves would want to preserve those customer relationships into the future. But of course, this is one of the issues that we are monitoring,” Willis said.
Barrels in the hand
New Zealand doesn’t have a “strategic fuel reserve” akin to the United States’ reserve which is capable of holding more than 700 million barrels of oil but currently holding about 400m barrels — the same amount of oil the US normally consumes in about 20 days.
MBIE has advised that as of Sunday, New Zealand’s five bulk fuel importers — Z, BP, Mobil, Gull and Timaru Oil Services — had enough petrol in the country to meet normal demand for nearly 33 days and enough diesel for 27 days.
There were additional supplies of 25 days’ worth of petrol and 22 days’ worth of diesel on ships bound for the country but not necessarily yet within the country’s Exclusive Economic Zone.
Those stock levels are within the rules.
As of the start of last year, the five importers have been required to hold 28 days’ cover of petrol, 24 days’ cover of jet fuel and 21 days’ cover of diesel.
That can be in the form of fuel on ships bound for New Zealand and already in the country’s economic zone, as well as in bulk storage actually inside the country.
Room for improvement
There does appear to be an acknowledgement those settings could be running it a bit thin, in the case of diesel at least.
From July 2028, any importer that has more than a 10% share of the diesel market — currently Z Energy, BP and Mobil — will need to have stocks of diesel equivalent to 28 days’ demand, instead of only 21.
Resources Minister Shane Jones advised colleagues in December that he would decide by April whether that obligation should be extended to Gull and Timaru Oil Services as well.
In a fuel emergency, the Government has a wide range of powers.
It can, for example, restrict the hours that petrol stations can open or order them to only open an alternate days, limit the amount of fuel that can be bought in any one transaction, and ultimately ratchet up restrictions on who can buy fuel.
The last resort would be to only allow fuel to be sold to “critical customers” at designated fuel outlets.
Barrels in the bush
As a member of the International Energy Agency, New Zealand is required to hold oil stocks equivalent to at least 90 days of its imports.
But in addition to fuel that is in, or en route to, the country, the 90 day buffer can also include fuel that New Zealand has rights to only on paper.
The difference between actual stocks and the 90-day minimum can be bridged with options or so-called “tickets” to purchase fuel at the time of an IEA-declared emergency, from oil companies either in New Zealand or overseas.
New Zealand’s options are placed with the UK, Japan and the US.
In practice, when the IEA has declared an emergency, signatories including New Zealand have agreed to release “their” oil onto the global market, rather than demand their share be delivered to them individually.
That is what happened today, when the IEA agreed to release 400 million barrels of oil from reserves and New Zealand did its bit by cashing in options equivalent to six day’s of its fuel demand.
A spokesperson for Willis says the rationale for the collective action is that it will free up supply, calm global markets and reduce current oil prices.
“New Zealand should stand to benefit as there will be more global supply of oil on the market at a lower price.”
How do we compare?
Ratings agency S&P says national and commercial reserves of fuel vary by country.
Australia has refined fuel cover for 30 days, so we would seem in a similar boat.
But combined reserves amount to 70 to 75 days of imports in India, 100 to 110 days in China, and more than 200 days in Japan and South Korea, it says.
Analyst Pauline Tang says refineries in Asia could use their crude inventories if fresh supplies from the Middle East were cut off. They are sufficient to fulfill their daily production for “two weeks to a month”, she says.