The Middle East conflict exposes our imported oil vulnerability and how electrification can provide energy stability

The world’s — and Australia’s — uncomfortable exposure to imported oil is no longer an abstract risk. As Israel‑U.S. strikes on Iran continue leading to a much broader regional conflict, we now face oil price spikes and even the prospect of running out of oil due to trade route disruption.

With a fifth of the world’s oil supply jeopardised by a single chokepoint – the Strait of Hormuz – the sensible response is to get off imported oil. Faster electrification powered by domestic renewable energy firmed with batteries would give Australia much needed energy and price security in times of global turmoil.

Market analysts say worldwide, oil supplies are facing “volatility shocks” that could lead to diesel, petrol, aviation fuel and supply shortages. Batteries paired with wind and solar — built here and operating within local electricity grids — would insulate households and industry from these geopolitical shocks. The choice is not theoretical: Australia can swap dependency on imported oil for electrons made at home, reducing both price instability and energy vulnerability.

Australia still relies on imported oil for most of our refined products, and on‑shore stocks have, at times, amounted to only weeks of fuel cover, well short of the International Energy Agency’s (IEA’S) 90‑day benchmark, leaving us exposed. Two subsidised refineries, in Geelong and Lytton, keep a small amount of sovereign capacity alive, but no subsidy can change the impact of conflict. Electrification solves these major energy and price challenges.

Energy and climate expert agencies are clear about the pathway. The IEA’s medium‑term outlook finds that even in ostensibly well‑supplied oil markets, geopolitical uncertainty remains a structural risk even as EV adoption erodes oil demand. In Australia, the Climate Change Authority says the near‑term heavy lifting should come from rapid electrification of light vehicles, early adoption in buses and lighter trucks and use of renewable fuels only where batteries won’t reach — an energy‑security plan as much as a decarbonisation plan.

EV sales are increasing in Australia but industry figures for January to November 2025 show petrol and diesel vehicles together still made up about 70.7% of all new light‑vehicle sales. That’s likely to change in the coming months if the Middle East conflict continues and petrol prices climb.

The sooner Australia moves to a grid dominated by wind and solar, underpinned by large‑scale and behind‑the‑meter batteries and electrified vehicles; the sooner we control our power supplies and pricing.

Government policy to incentivise the move from petrol is urgently needed to speed up the shift to electrified transport. The present crisis should be the incentive needed to get Australia electrifying everything.

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References & further reading:

• Dia, H. (2026, March 3). Strikes on Iran show why quitting fossil fuels is more important than ever. Renew Economy. https://reneweconomy.com.au/strikes-on-iran-show-why-quitting-fossil-fuels-is-more-important-than-ever/

• War on Iran signals urgent need for Australia to end risky imported oil dependency. (n.d.). Pearls and Irritations. https://johnmenadue.com/post/2026/03/running-on-empty-war-on-iran-signals-urgent-need-for-australia-to-end-risky-imported-oil-dependency/

• Sabbagh, D. (2026, March 11). Iran has largely halted oil and gas exports through strait of Hormuz. The Guardian. https://www.theguardian.com/world/2026/mar/03/iran-has-largely-halted-oil-and-gas-exports-through-strait-of-hormuz

• CLIMATE CHANGE AUTHORITY. (2024). Transport Sector Summary Review. https://www.climatechangeauthority.gov.au/ https://www.climatechangeauthority.gov.au/sites/default/files/documents/2024-09/2024SectorPathwaysReviewTransport.pdf

• Transport - Fuel. (2025, December). onlyfacts.io. https://onlyfacts.io/transport/fuel