Iranian Strikes Halt Oil Shipments Through Strait of Hormuz

Iranian strikes on oil and natural gas tankers have brought shipping through the Strait of Hormuz to a near-total standstill this week. The waterway normally carries one in five barrels of oil traded worldwide. The halt has driven up crude prices and raised fuel costs in distant markets including Australia.

Officials have coordinated releases from emergency reserves and ordered conservation measures.

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Emirates have increased use of existing pipelines that bypass the strait. The UAE is expanding capacity at the port of Fujairah, and Saudi Arabia is studying ways to enlarge its east-west pipeline to the Red Sea. Energy companies are also examining new pipeline proposals, including one that would carry oil from southern Iraq through Syria to the Mediterranean.

Officials say such projects typically take two to five years to complete.

Australia depends on imported refined fuels, most of which originate from Middle East crude that passes through the strait. The government has announced a $10 billion package to increase minimum fuel stock levels and build a government-owned 1-billion-litre reserve.

The country has also secured additional shipments from North America and Europe. Officials note that larger reserves would not prevent price increases but could avert local shortages. Climate advocates say the episode shows the value of shifting to electric vehicles and renewable energy to reduce long-term dependence on imported oil.