2026 Fuel Prices & Security of Supply

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wellygary

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#3482555 20-Apr-2026 15:09

SaltyNZ:

As an aside, if I ask the guessing machine how long it takes to sail from the Gulf to Korea, how long it takes to refine a VLCC load of oil, and then how long it takes to sail from Korea to NZ, it tells me somewhere between 40-52 days depending on how fast they sail, allowing 10 days to fully process the crude on the tanker. So that might give us a fortnight of diesel still in the country if a) everything opened up fully today, b) there are a bunch of fully loaded tankers ready to put the pedal to the metal, and c) everyone sails at top speed and the weather is good. And of course every day of delay eats that best case, and I assume that you can't just switch a refinery on like a light switch so if they run out of stuff to process it might take a day or two to prime everything again before they can start pumping out refined products.

Although you're not factoring in the country reserves that are held, (particularly in North Asia),

Japan as an example got absolutely crucified in the 70/80s oil crisis and have had a longterm policy to insulate local oil refiners from similar crude disruptions, and therefore hold around 200 days of crude on shore as a buffer, Korea and China are similar, and I suspect Singapore are also similar ( but the actual extent of holding s there are a state secret )

So yip, the strait being closed is a HUGE problem, but the North Asian refiners are not suddenly going to find they have no feedstocks, in Korea refiners are being allowed to swap/borrow from the strategic reserve and I suspect this will be same for other countries,

eventually when this concludes, these countries will slowly start to refill their reserves,
(although they will likely be on the positive financial side as they will be "selling" reserve to local refiners during the crisis, and later refilling them after the crisis at a lower price)

Things were looking so much more positive on Saturday Morning, but now its all gone back to being a $hit sandwich...

johno1234

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#3482558 20-Apr-2026 15:14

Rikkitic:

johno1234:

"At this point it is almost 100% guaranteed that for all intents and purposes the fuel here is going to run out at current consumption levels based on the last sailing from the Persian Gulf to Asia and from Asian refineries to NZ"

I don't believe that. There are multiple substitution scenarios including the refineries sourcing crude from other sources including the USA and New Zealand sourcing diesel from refineries elsewhere in the world that are not reliant on the Strait of Hormuz. All these will be expensive but prevent diesel running out. If supply is constrained there is a levels system in place to manage reduced usage. In the mean time there is no point in reducing usage as available storage is being used.

This is pretty much what I believe. In the worst possible case, fuel will become horrendously expensive, no doubt prompting all kinds of crime, but it won't be completely unavailable. My circumstances are such that I just can't get too worried about it. I get by on very little. Time will tell.

Goodness me, I never took you for the laissez-faire, market-will-sort-it-out type! Who are you and what have you done with Rikkitik? :-)

SaltyNZ

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#3482559 20-Apr-2026 15:21

wellygary:

Although you're not factoring in the country reserves that are held, (particularly in North Asia),

Yeah that's a good point, I had not factored that in. I wonder how much it actually is...

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johno1234

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#3482561 20-Apr-2026 15:24

fastbike:

Actually there is a massive reason to be reducing usage - we are spending an additional $200M per week on oil imports. Which means that our terms of trade are going to take a massive hit and the cost of everything imported and everything transported (i.e. everything) is going to take a big hike up. So hello inflation, coupled with economic contraction - sounds like classic hits from the 1970s all over again. https://www.commbank.com.au/articles/newsroom/2026/04/explainer-what-is-stagflation-and-why-are-we-talking-about-it-again.html

Rikkitic:

My circumstances are such that I just can't get too worried about it. I get by on very little. Time will tell.

And there we go, head in the sand attitude "I get by on very little" No you don't - every kiwi, even those that have EV (check), solar (check) don't fly overseas (check) etc still rely on hundreds of energy "slaves" powered by oil.

Now, I'll cut you some slack as you're not in charge. But for the crowd in charge - the coalition - my contempt deepens every day. They are setting us up for a massive crash through their dogma and incompetence.

You are wrong. We are using all our (inadequate) storage currently. Note that the owners of Marsden Point have commenced cleaning up old tanks and setting up infrastructure to increase diesel storage by nine days. I just explained to you that if we reduce usage then we won't have enough storage to fully accept future shipments. We would then have the exact same vulnerability, suffer the exact same price increases on transport that cannot be avoided and additionally suffer the economic contraction from cutting down on activity.

Rikkitik's head is not in the sand. Both he and I have explained why but you don't seem to be reading or grasping it. This "cut me some slack" comment is making you come across as arrogant and rude and unable to argue without descending into aggression and ad-hom.

If you think the current coalition is incompetent (you just can't stop with the politics in this thread can you?) what is your suggestion for the immediate term problem that this thread is about? Please remember that reducing consumption won't help one iota.

Handle9

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#3482636 20-Apr-2026 21:04

HarmLessSolutions:

JPNZ:

I find all of the "upcoming disruption" talk interesting when Diesel has fallen (In chch at least) between 60-80c over the last 10 days. Cheapest Diesel is currently $3.16, if the fuel companies had short supply you would think the opposite would happen?

The fossil fuel industry is very reactive to immediate issues rather than taking the longer viewpoint. Aligned with that price is very much a 'now' indication whereas long term supply is what many fuel customers are focussed on at this point. The fuel companies aren't able to factor 'what if we run out' into their pricing as that would be extremely disruptive on multiple fronts.

Long term supply will be fine. There are plenty of sources of supply and increased prices make more of them viable.

What we are looking at is a short term potential supply shortage. That's all, not some sort of long term supply apocalypse.

wellygary

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#3482637 20-Apr-2026 21:08

SaltyNZ:

wellygary:

Although you're not factoring in the country reserves that are held, (particularly in North Asia),

Yeah that's a good point, I had not factored that in. I wonder how much it actually is...

https://www.iea.org/data-and-statistics/data-tools/oil-stocks-of-iea-countries

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Rikkitic

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#3482643 20-Apr-2026 22:29

fastbike:

And there we go, head in the sand attitude "I get by on very little" No you don't - every kiwi, even those that have EV (check), solar (check) don't fly overseas (check) etc still rely on hundreds of energy "slaves" powered by oil.

Now, I'll cut you some slack as you're not in charge. But for the crowd in charge - the coalition - my contempt deepens every day. They are setting us up for a massive crash through their dogma and incompetence.

Thanks but I don't need your slack or anyone else's. Nor do I crave your approval. My energy slaves meet my needs and that is enough for me.

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gzt

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#3482644 20-Apr-2026 22:30

Handle9: Long term supply will be fine. There are plenty of sources of supply and increased prices make more of them viable. What we are looking at is a short term potential supply shortage. That's all, not some sort of long term supply apocalypse.

Qatar has indicated 3-5 years to repair gas field damage affecting 17% of output. I'd call the longer end of that medium term. There are other examples. Likewise there is significant potential for further medium term issues resulting from escalation or failure to conclude appropriate treaties.

Rikkitic

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#3482646 20-Apr-2026 22:38

johno1234:

Goodness me, I never took you for the laissez-faire, market-will-sort-it-out type! Who are you and what have you done with Rikkitik? :-)

Not laissez-faire, just not Chicken Little. Head not in the sand and I do not believe the sky is falling.

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Handle9

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#3482651 20-Apr-2026 23:27

gzt:
Handle9: Long term supply will be fine. There are plenty of sources of supply and increased prices make more of them viable. What we are looking at is a short term potential supply shortage. That's all, not some sort of long term supply apocalypse.

Qatar has indicated 3-5 years to repair gas field damage affecting 17% of output. I'd call the longer end of that medium term. There are other examples. Likewise there is significant potential for further medium term issues resulting from escalation or failure to conclude appropriate treaties.

It’s an issue if that is the only source of LNG or other sources can’t ramp up to take up the slack. That isn’t really the case in the medium term.

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