Analysis from The Wise Response Society
One week after US-Israeli strikes on Iran triggered the effective closure of the Strait of Hormuz, the Wise Response Society warns that the situation has deteriorated significantly since its initial alert on 3rd March – and that the New Zealand government’s silence on contingency planning is becoming increasingly dangerous.
If the New Zealand government has a plan for rationing fuel, it has not discussed it with the public. It is the position of the Wise Response Society that it must do so immediately.
In the nine days since US-Israeli strikes on Iran triggered the effective closure of the Strait of Hormuz, the crisis has moved well beyond a shipping disruption. Force Majeure declarations are now cascading through the entire supply chain that New Zealand depends on for 100% of its refined fuel, from Gulf producers through to the South Korean and Singaporean refineries that supply our petrol, diesel, and jet fuel. When a supplier declares Force Majeure, it is legally stating that it cannot fulfil its contracts. New Zealand may have only two to three weeks of physical fuel in the country, the pipeline of future deliveries is being disrupted by Force Majeure, and the bulk of our stated 90-day reserves consist of untested paper agreements with overseas governments.
Yet the New Zealand government has offered no public assessment of fuel supply risk, no activation of the National Fuel Security Plan, and no indication that contingency planning is underway. Countries across the region, from Thailand to Myanmar to India, have already taken concrete action. New Zealand has said nothing.
Wise Response Chair Nathan Surendran says it is clear the conflict is not going to be the “four-week process” projected by President Trump.
“This puts New Zealand in a critical situation that needs planning, public awareness, and action readiness. New Zealand is at the end of a very long supply chain and is more vulnerable than most to supply shocks of this kind. All of our exporting and importing relies on timely supply of fuel, and this is about to be seriously disrupted. All of our productive sector also relies on timely fuel supply, so this too will be heavily disrupted. The government needs to be getting its rationing priorities in place now so that people and businesses can plan for themselves.”
The conflict is not ending in four weeks
When Wise Response issued its first press release on this subject last week, President Trump was projecting a “four-week process.” One week later, that timeline is looking increasingly unrealistic.
Analysts at Verisk Maplecroft warn that the US should “brace for potentially an extended conflict,” noting that Iran is “a huge country with a huge population” and a very extensive security apparatus. The Brookings Institution’s Suzanne Maloney has said the situation is “going to be more complicated than the White House may have hoped.” Oxford Economics initially projected one to three weeks, with a maximum of two months. US war aims have shifted repeatedly – from destroying Iran’s nuclear programme, to eliminating its ballistic missile capability, to unspecified “protection of the American public.”
Iran’s retaliatory missile rate has declined, likely reflecting elimination of targets and reduced missile defence systems interdictions leading to higher success rates per launch, but the IRGC continues to attack vessels and maintain its hold on the strait. There is no ceasefire, no negotiation, and no clear off-ramp. Iran’s security chief Ali Larijani has explicitly rejected talks with the US.
Most critically for energy markets, the damage is becoming structural. On 6 March, Qatar’s Energy Minister Saad Sherida al-Kaabi warned that if the war continues, other Gulf energy producers may be forced to halt exports and declare Force Majeure. Qatar had already stopped gas production on 2 March and declared Force Majeure on gas contracts on 4 March. Oil fields across the Gulf have shut down as a precaution. Oil facilities in Kuwait and Saudi Arabia have been struck by Iranian missiles. This is no longer a shipping logistics problem that resolves when the strait reopens – production infrastructure is being damaged and taken offline.
Iranian strikes have hit refineries in at least six countries: Bahrain, Kuwait, Qatar, Saudi Arabia, the UAE, and Oman. Saudi Aramco’s Ras Tanura refinery – the kingdom’s largest – has been shut down. Qatar’s Ras Laffan LNG facility, the biggest in the world, has been struck. Fuel storage at Oman’s port of Duqm has been hit by drones. Oil fields in Iraq and Kuwait have been forced to cut production because Gulf storage is filling up with nowhere to ship crude. As Rystad Energy’s Amir Zaman warned this weekend, restarting oilfields that have been shut in “could take days or weeks or months, depending on the types of fields, age of the field, the type of shut-in.” The idea that this crisis ends when the shooting stops is a dangerous illusion. The physical damage has already been done, and the supply disruption will outlast the conflict itself.
This point cannot be overstated: even if traffic through the Strait of Hormuz were restored tomorrow – and it will not be – the damage already inflicted on energy infrastructure across the region would take months to repair. Additionally, a significant proportion of New Zealand’s strategic reserve is ‘preferential buy options on the oil market, and declarations of Force Majeure mean those options / obligations cannot be met as we describe below.
New Zealand’s fuel supply chain is under direct and mounting pressure
The headline oil price – Brent crude at approximately US$93 per barrel as of Friday’s close, up over 20% in a single week – understates the severity of the situation for New Zealand. Goldman Sachs has warned that prices could exceed US$100 per barrel this week if no resolution emerges.
But the real story is in refined products and physical crude markets, which is where New Zealand’s actual exposure lies. Kpler, a leading commodity intelligence firm, reports that physical crude delivered into China is now approaching US$100 per barrel – well above the paper futures price. Singapore jet fuel prices have surged approximately 140%. If crude had moved in proportion to jet fuel, Brent would already be trading around US$175. The gap between paper and physical markets reflects a dangerous complacency: financial markets are still treating this as a temporary disruption, while the physical supply chain is already in crisis.
The Asian refineries that supply virtually all of New Zealand’s fuel are under direct pressure:
- South Korea, which provides 48% of NZ’s refined fuel imports, sources approximately 70% of its crude from the Middle East, with over 95% of that volume transiting the Strait of Hormuz. South Korea’s four major refiners have formed a joint task force. Kpler has recommended that South Korean refineries make proactive run-cut decisions – that is, reduce output – due to reduced crude supply and feedstock scheduling challenges.
- Singapore, which provides 33% of NZ’s refined fuel imports, has no domestic oil or gas production whatsoever. It is one of Asia’s three principal refining centres and is reporting reduced output due to disrupted Middle Eastern crude supply.
- China, which holds roughly 18% of global refining capacity, ordered its largest oil refineries to halt diesel and petrol exports on 5 March. India has instructed state-owned enterprises to consider withholding clean product exports. Thailand suspended crude and petroleum exports on 1 March. Indonesia is calling force majeure on some contracts.
As the New Zealand Energy Substack reported this week: diesel is likely to tighten before petrol, because Asian refineries are optimised for the medium sour crudes from the Middle East that are no longer arriving. They cannot simply substitute other crude grades and produce the same product mix. Diesel powers New Zealand’s freight, agriculture, construction, and fishing fleets. It is the most economically critical fuel we import.
New Zealand’s fuel reserves – 28 days of petrol, 24 days of jet fuel, and just 21 days of diesel – were not designed for this scenario. The diesel reserve is not scheduled to increase to 28 days until July 2028. Industry estimates suggest the country typically holds only two to three weeks of commercial fuel stocks in storage. Contracted March cargoes are reportedly still in transit, but unless the situation resolves quickly, April supply is in serious question.
Force Majeure is cascading through NZ’s supply chain
The legal term Force Majeure, meaning an unforeseeable event that prevents a party from fulfilling a contract, has become the defining feature of this crisis. In the past week, declarations have cascaded from Gulf producers through to the Asian refiners and petrochemical manufacturers that sit directly upstream of New Zealand.
Gulf producers:
- QatarEnergy (Qatar) declared Force Majeure on LNG deliveries around 3-4 March, after halting production at Ras Laffan, the world’s largest LNG export facility. Qatar’s Energy Minister Saad Sherida al-Kaabi has warned that all remaining Gulf exporters are expected to declare Force Majeure within days if the situation continues, and has predicted oil could hit US$150 per barrel if the war continues for weeks.
- Kuwait Petroleum Corporation formally declared Force Majeure on oil and refinery products around 7 March, citing Iranian threats, attacks on Kuwaiti territory, and the absence of available vessels.
New Zealand’s direct supply chain:
- Yeochun NCC (South Korea) declared Force Majeure on 4 March on petrochemical supply, because naphtha feedstock is no longer available. 54% of South Korea’s naphtha supply normally transits the Strait of Hormuz.
- PCS (Singapore) declared Force Majeure on 5 March on all customer shipments.
- Aster Chemicals and Energy (Singapore) declared Force Majeure around 7 March on ethylene and propylene supplies.
- Chandra Asri (Indonesia) declared Force Majeure on 3 March on all contracts, citing raw material disruption.
- Petronet LNG (India) issued a Force Majeure notice on 3 March on its Gas Sale and Purchase Agreement.
- Mangalore Refinery and Petrochemicals (MRPL) (India) declared Force Majeure around 5 March on all future gasoline export cargoes. MRPL has also shut its crude unit and secondary units at its 300,000 barrel-per-day refinery.
Beyond formal Force Majeure declarations, production shutdowns are spreading. Iraq is holding back production as storage fills. The UAE’s ADNOC is cutting offshore production. Saudi Arabia has shut its biggest refinery. In China, Zhejiang Petrochemical (backed by Saudi Aramco) has shut a 200,000 barrel-per-day crude distillation unit, and Fujian Refining has shut an 80,000 barrel-per-day crude unit. China ordered a halt to new refined gasoline export contracts on 5 March. Thailand has halted all fuel exports. Vietnam’s Binh Son Refining has asked the government to prioritise domestic crude supply and limit exports through Q3.
The Force Majeure declarations cascading through our supply chain threaten the pipeline of future deliveries. When suppliers like those in South Korea and Singapore declare Force Majeure, it means the contracted fuel cargoes that New Zealand is relying on to replenish Tier 1 and Tier 2 stocks may simply not arrive. Meanwhile, the oil tickets that make up the bulk of the 90-day headline figure have never been tested in a crisis of this magnitude, and there is no public information on whether New Zealand could actually draw on them while the US, UK, and Japan are themselves scrambling for supply. In a global crisis where those same countries are simultaneously under fuel supply stress, the practical value of these tickets is questionable at best.
Australia is already rationing fuel. New Zealand is pretending nothing is happening.
Across the Tasman, the situation has moved beyond warnings. Australian fuel wholesalers have begun rationing petrol and diesel supplies to retailers, driven by a combination of panic buying and tightening wholesale supply. Queues have formed at service stations in Perth and Sydney. Petrol prices have jumped from A$1.71 to over A$2.13 per litre.
Professor Allan Fels, former chairman of the Australian Competition and Consumer Commission, has warned publicly that if the conflict continues beyond six weeks, Australia will need to implement formal fuel rationing – comparing the potential measures to the rationing seen during the 1973 Arab oil embargo. Australia holds 36 days of petrol reserves – more than New Zealand – and its strategic reserves are still non-compliant with International Energy Agency requirements despite years of efforts to close the gap.
The Australian Maritime Union has declared that Australia’s fuel security crisis “has been laid bare” and called for urgent rebuilding of sovereign fuel storage and domestic refining capacity. The Australian Climate Council has warned that the crisis demonstrates the fundamental vulnerability of economies still dependent on imported fossil fuels.
New Zealand has less fuel in reserve than Australia, less domestic refining capacity (none), and sits further from alternative supply sources. Yet the New Zealand government has offered no public assessment of fuel supply risk, no activation of the Fuel Sector Coordinating Entity, and no indication that contingency planning is underway.
What Wise Response is calling for
1. Immediate government transparency on fuel supply status. The government must tell New Zealanders exactly how much physical fuel is currently in tanks onshore, how much is aboard tankers in transit, and how much of our 90-day IEA obligation consists of untested oil tickets held by governments that are themselves under fuel supply stress. It must disclose what the contracted supply pipeline looks like for April and whether any of NZ’s fuel purchase contracts have been affected by the Force Majeure declarations cascading through our supply chain. The public deserves honest information, not silence.
2. Activate the National Fuel Security Plan. The government’s own Fuel Security Plan (November 2025) outlines contingency steps for exactly this scenario, including activation of the Fuel Sector Coordinating Entity to lead disruption response. These mechanisms should be activated now, publicly and transparently, not held in reserve until shortages are already upon us.
3. Prepare an equitable rationing framework using Tradable Energy Quotas (TEQs). If rationing becomes necessary, and with each day this crisis continues it becomes more likely, the only question is whether it will be fair or chaotic.
Without a rationing framework, the default outcome is price rationing: pump prices spike, panic buying accelerates shortages, and those least able to afford fuel, including rural communities, farmers, freight operators, and lower-income households, are left most exposed. This is already happening in Australia.
Tradable Energy Quotas (TEQs) provide a proven, equitable alternative. Every citizen receives an equal basic energy entitlement. Those who use less can sell their surplus. Those who need more, such as farmers and freight operators, can purchase additional units on an open market. The system guarantees a floor for vulnerable households while accommodating the varying energy needs of different sectors.
TEQs are explicitly designed for precisely this situation: a nation confronting immediate fuel scarcity while needing to manage a longer-term structural transition away from imported fossil fuels. The system was subject to extensive UK Government scrutiny and was endorsed by the UK All Party Parliamentary Group on Peak Oil. I first called for investigation of TEQs in my August 2025 submission to the DPMC Long-term Resilience Briefing on behalf of the Wise Response Society. The current crisis makes that call not merely urgent but overdue.
4. Acknowledge the structural reality. This crisis is not an aberration. It is the predictable consequence of a nation with no domestic refining, no meaningful strategic reserve, and near-total dependence on imported hydrocarbons sitting at the end of the world’s longest and most fragile supply chain. The long-term response must include rapid electrification of transport and industry, investment in decentralised domestic renewable energy, and planned reduction in aggregate energy demand. But those measures take years. The rationing framework is needed now.
The window is closing
One week ago, the closure of the Strait of Hormuz was an emerging crisis. Today, it is an established fact with Force Majeure declarations cascading through every link in New Zealand’s fuel supply chain. The strait is not reopening. The conflict is not ending quickly. The Asian refineries that supply New Zealand are cutting output and restricting exports. Australia is already rationing.
New Zealand has perhaps two to three weeks of physical fuel in the country. The tankers and purchase contracts that are supposed to replenish those stocks are being disrupted by Force Majeure declarations across the supply chain. The oil tickets that make up the bulk of the 90-day headline figure have never been tested. The time for contingency planning was before this crisis began. The time for transparency is now. The time for rationing preparation is before the queues form, not after.
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