New Zealand's fuel crisis deepens as global oil chaos hits imports

New Zealand's fuel security is under pressure as global oil supply chains face severe disruption. The closure of the Marsden Point refinery in 2022 left the country dependent on imported fuels, and recent conflicts in the Middle East have now pushed prices higher. Senior politicians remain divided over whether shutting the facility was the right move.

The Marsden Point oil refinery, once New Zealand's largest fuel import terminal, stopped operations in 2022. Since then, the country has relied entirely on imported refined fuels. Current stockpiles stand at seven weeks' worth, but Finance Minister Nicola Willis admits this buffer depends on steady shipments.

Global oil markets have been thrown into chaos since early March 2026. US and Israeli strikes on Iran triggered a near-total shutdown of the Strait of Hormuz, a critical shipping route. Tanker traffic collapsed from 141 ships on February 27 to just four by March 8—cutting 17-20% of the world's oil supply. Physical crude prices, like Oman, surged past $162 per barrel, while Brent futures lagged at $112.

The strait remains under a 'soft closure' due to Iranian threats, mines, and drone attacks. Anchored tankers and damaged infrastructure, including Saudi refineries, have worsened the crisis. Gulf producers are now pressing the US to intervene and reopen the route as the conflict enters its fourth week.

Back in New Zealand, rising fuel costs are hitting households hard. Willis is exploring temporary financial support for those struggling most with budget pressures. Yet, political debate continues over whether Marsden Point's closure has left the country too exposed to global shocks.

The Strait of Hormuz crisis has pushed oil prices to extreme levels, directly affecting New Zealand's fuel imports. With Marsden Point no longer refining locally, the country must now navigate both supply risks and higher costs. Willis has signalled potential relief measures, but the long-term impact depends on how quickly global trade routes stabilise.