The Commonwealth's forecast of a record $416 billion in resources and energy exports rested on an assumption that lasted nine days. The Resources and Energy Quarterly, published by the Department of Industry, Science and Resources on 3 July, sets it out in Box 1.1: the forecasts "assume the blockade of the Strait of Hormuz ends in late June 2026 and that trade then begins to normalise, with the flow of oil back to normal by March 2027". On Sunday, Iran declared the strait closed.
Brent crude was trading near US$79 a barrel on Monday, up about 4 per cent on Friday's settlement of US$76.01. That is roughly 13 per cent above the US$70 benchmark the ACCC used in its most recent weekly fuel report. Australian motorists have not paid for this leg yet.
They have paid for the last one. The ACCC's report of 10 July, covering prices to 8 July, put average petrol across the five largest cities at 167.5 cents a litre, up 16.0 cents in nine days. Diesel was 185.8 cents, up 12.3 cents. Most of that rise is tax. The 32 cent excise cut that ran from 1 April was halved to 16 cents on 1 July, worth up to 17.6 cents at the bowser once GST is counted. The oil move that began this weekend sits on top of it.
On the export side, the same closure is a windfall. Australian LNG does not go through the Strait of Hormuz. Cargoes load in Western Australia, the Northern Territory and Queensland and sail directly into Asia. The roughly 20 per cent of global LNG trade that did cross the strait in 2024 was almost entirely Qatari and Emirati, according to the US Energy Information Administration, and Qatar sends more than 90 per cent of its exports through it. Australia does not ship through Hormuz. It competes with what comes out of it.
That is the split. Woodside Energy closed Friday at $29.05, up 4.2 per cent across the week. Santos closed at $7.62, up 7.3 per cent. Australia's gas producers sell into a market whose competing supply has been choked. Australian households and Australian airlines buy refined fuel from that same market.
Qantas has already told investors what the second half of that trade costs. In its April market update the airline put its fuel bill for the half at $3.1 billion to $3.3 billion, against about $2.5 billion guided in February. Around 90 per cent of its crude exposure was hedged. The hedge does not cover refining margins, and jet fuel margins rose from about US$20 a barrel in February to a peak near US$120.
Madeleine King, the Minister for Resources, launched the quarterly on 3 July saying the sector "continues to deliver strong export earnings that support jobs, investment and economic growth, despite geopolitical uncertainty". The uncertainty the document priced in was a strait that reopened. Its numbers have LNG export earnings rising from $59 billion in 2025-26 to $65 billion in 2026-27, and total resources and energy exports at $416 billion, a $42 billion upgrade on the December forecast.
The Reserve Bank has been watching the same barrel. Holding the cash rate at 4.35 per cent on 16 June, the Monetary Policy Board said "higher fuel prices have added directly to inflation and there are indications that this is passing through to the prices of other goods and services, so inflation is likely to remain high for some time". The board pointed at the Middle East by name, saying there are "plausible scenarios where inflation is higher and activity lower than envisaged". It next meets on 11 August.
The ACCC has told retailers it is watching. Commissioner Anna Brakey said on 29 June that the regulator "expects that fuel retailers will not attempt to take advantage of this increase in excise" and would not hesitate to act on misleading statements about price movements. Its next weekly report is the first hard reading of what Sunday's closure does at the bowser, and it is the number to watch: the excise is already in the price, and the barrel has moved again since.
