Is the high price of fuel here to stay?

Australians are paying some of the highest fuel prices they have ever seen. Petrol costs around 240 cents a litre, and diesel is even more expensive at over 280 cents a litre. Farmers, truck drivers, and construction workers are feeling the pain the most because they rely on diesel to power their heavy machines. Energy experts say the main reason for these high prices is conflict — wars happening far away that are disrupting the world's oil supply.

So how did fuel get so expensive? Experts point to two major conflicts driving up prices. First, the United States under President Donald Trump is in a serious standoff with Iran, and Iran has been attacking ships and oil facilities. Iran's allies, a group called the Houthis, have also been striking Saudi Arabia, one of the world's biggest oil-producing countries.

The second conflict is in Ukraine, where the country has been fighting back against Russia's invasion by targeting Russian fuel refineries. Both Russia and the Middle East supply a huge share of the world's oil and diesel. Saul Kavonic, head of energy research at MST Financial, said: 'We are facing the largest oil market shock in the history of the oil market, and it's happening across both the Middle East and Russia.'

Australia is especially affected because it is the biggest diesel importer in the world, meaning it buys more diesel from other countries than any other nation. Diesel is essential for mining, farming, and moving goods by truck across the country's vast distances. When diesel supply is disrupted overseas, Australians feel it quickly at the pump and in the price of everyday goods.

So what would it take for prices to come down? Experts say the best outcome would be if the wars in the Middle East and Ukraine ended soon, and if new oil production started up in other parts of the world. Even then, damaged oil facilities would need to be repaired and global oil supplies would need to be built back up, so any price relief would still take time.

Shipping expert Perry Wilson from Rystad Energy explained what needs to happen first. 'Ultimately, you need to see actual fewer tanker attacks happening in both the Red Sea and the Strait of Hormuz,' he said. Fewer attacks would lower the cost of insuring ships, which would make it cheaper to move oil around the world, and that would eventually bring down fuel prices for everyone.

But peace is not guaranteed, and the United States and Iran are still far apart in any talks. If the conflicts drag on at a lower level, experts expect fuel prices to stay the same or even climb higher. That is because the world would keep using up its stored oil faster than new supplies could fill the gap.

The scariest scenario is if the Middle East conflict keeps getting worse. Kavonic warned that Iran is likely to increase its attacks, and that after U.S. midterm elections, President Trump may feel freer to take stronger actions. Less oil flowing out of the Middle East would force countries to hold on to their own supplies rather than selling them to importers like Australia.

In a worst-case situation, experts fear diesel could hit $4 a litre and petrol could reach about $3 a litre, making everyday life much more expensive for Australians. The cost of food, goods, and services would all rise because almost everything relies on trucks and machines that run on fuel. Kavonic warned this could even trigger a global recession — a serious slowdown of the world's economy.

The Australian government has already tried to help by paying to bring in extra fuel shipments and cutting fuel taxes for a period, though that tax cut has now ended. More Australians are buying electric cars, but diesel remains critical for heavy vehicles that cannot easily switch to electricity. For now, Australians and their leaders are watching the world's conflicts closely, hoping for peace while preparing for harder times ahead.