Fuel bump from renewed US-Iran fighting likely to be modest
Thursday, 9 July 2026
The renewed conflict between the United States and Iran is expected to have only a modest impact on petrol prices in New Zealand.
But an international law expert says the war could drag on for some time yet.
The renewed fighting has lifted oil prices and renewed uncertainty for global markets.
But Waitomo Group chief executive Simon Parham says New Zealand motorists are unlikely to face the sharp fuel price rises seen earlier this year.
The United States carried out strikes on Iranian military vessels after Iran attacked three commercial vessles in the strait, prompting President Donald Trump to declare the interim ceasefire was “over“.
Iran had said that the interim ceasefire deal gives it the right to manage traffic through the strait.
It’s the latest wrinkle in global tensions, with China launching a long-range ballistic missile carrying a dummy warhead into the Pacific Ocean earlier this week.
The price of global benchmark Brent Crude oil rose more than 5% to around US$78 a barrel on Thursday, well below the late-April peak of more than US$120 a barrel.
Parham said he’ll wait and see how the Singapore markets react to the renewal of hostilities.
“That’s the true driver of petrol prices in New Zealand and across the Asia-Pacific region.”
Parham said they’ve seen fuel prices soften in recent weeks with any increase at the pump likely to be “a couple of cents” compared to the 10-20c price hikes in March.
“If anything, we’re seeing a muted response from the market, because there is still that geopolitical risk and volatility priced in. That hasn’t exited because there’s no real firm peace plan in place.”
University of Waikato professor Alexander Gillespie says the latest strikes showed any lasting peace remained a long way off.
“Before you even get to a peace deal, like a treaty, you have to have a ceasefire. It’s a stepping stone the ceasefire but we’re not even at the point of a stepping stone.
“It could take a long time from now. And on top of that, there's no good faith between the parties.”
Gillespie said the best step towards getting a longer ceasefire is having independent monitors present to mediate the situation.
“At the moment all you've got is he said, she said, and that doesn't work.
“You’d ideally have something like some UN peacekeepers in there, not to negotiate, not to keep the peace, but just to monitor what’s already been agreed.”
Gillespie said America started the war after being provoked by Iran but “there’s fault on both sides”.
It means third parties like New Zealand feel the consequences, he said.
Parham said it’s looking like a “bumpy ride” for the next couple of months.
“When the ceasefire was announced, we always knew this was going to be a bumpy ride. So this is just sort of one of those bumps in the ride as we continue through the process.”