Every time a global crisis erupts, Australians often feel the impact almost instantly at the petrol pump.
Just last month, analysts warned that escalating tensions in the Middle East — particularly Iran’s threat to block a vital shipping route in retaliation for US and Israeli strikes — could drive petrol prices in Australia up to $2.20 a litre.
Roughly 20% of global oil passes through the Strait of Hormuz, a narrow waterway bordered by Iran, Oman, and the UAE that serves as the only sea passage to the Persian Gulf. It’s also a critical route for liquefied natural gas — including energy bound for Australia.
In 2024, Australia imported $38 billion worth of petrol and diesel, with drivers spending an average of $3,200 annually on fuel. As of April 2025, Australia held just 50 days of fuel reserves — including 31 days of petrol — well below the 90-day threshold recommended by the International Energy Agency.
These figures raise an important question: Could the increasing adoption of electric vehicles (EVs) help reduce Australia’s exposure to such fuel vulnerabilities?
Australia’s Heavy Dependence on Imported Oil
Despite being a major exporter of coal and liquefied gas, Australia relies heavily on imported oil. Dr. Vlado Vivoda from the University of Queensland explains that 80–90% of the petrol sold in Australia is imported. The process typically begins with crude oil extracted from the Persian Gulf, shipped through the Strait of Hormuz to refineries in Asia, and then transported to Australia.
Australia once had 20 domestic oil refineries but now operates only two. Most refined fuel comes from Korea, Singapore, Malaysia, Taiwan, and Brunei — countries equipped with large-scale refining capacity.
This dependency leaves Australia’s fuel supply vulnerable to disruptions not just in the Middle East, but also in politically sensitive regions like the South China Sea. Furthermore, fuel used in heavy transport, aviation, and industry compounds the economic impact of rising oil prices, leading to broader inflationary pressures across goods, food, and services.
Australia’s vulnerability has been exposed during past crises — such as the 1970s oil shock following the Iranian Revolution, or the more recent market disruptions caused by Russia’s invasion of Ukraine.
“When these dependencies work, they support economic growth,” said Leonard Quong of BloombergNEF. “But when they break down, they leave a country exposed.”
The Transition to Clean Energy as a Security Strategy
While EVs and renewable energy are often seen through the lens of climate action, they also offer nations a way to secure energy independence by reducing reliance on volatile oil markets.
The International Energy Agency recently reported that 70% of new clean energy investment is now coming from fossil fuel-importing nations. China, for instance, is rapidly scaling up its renewable capacity, building the equivalent of five large nuclear power plants’ worth of renewables every week.
Caroline Wang from Climate Energy Finance noted that China’s green transition is partly about national security: “Energy security and geopolitics are now inseparable.”
EVs Are Already Reducing Oil Demand
According to BloombergNEF, electric vehicles are already displacing roughly 2 million barrels of oil consumption per day — about as much as Germany uses daily. While global oil demand is expected to peak by the end of the decade, a potential second term for Donald Trump could delay that by two years due to his rollback of EV-friendly policies.
In Australia, uptake remains slow. Only around 14% of vehicles sold this year are expected to be electric or hybrid, far below the global average. By 2025, it’s projected that one in four new vehicles globally will be plug-in EVs — and in China, it could be half.
Complicating matters, Australia’s car fleet turns over slowly, with the average vehicle being a decade old. So, even if new EV sales increase, fuel use will decline gradually. Quong pointed out that recent fuel efficiency standards will help — but stronger policy is needed to accelerate change.
Meanwhile, many Australians are already taking steps toward self-reliance by installing solar panels at home and using them to charge electric vehicles, reducing dependence on foreign energy.
Avoiding a New Form of Energy Dependence
Some energy experts caution that transitioning away from oil shouldn’t mean relying heavily on imported EVs and solar tech. While vulnerabilities persist, Quong noted a key difference: oil requires continuous imports, whereas renewable assets like solar panels can produce energy for decades without further input.
“In fossil fuel systems, your energy security depends on what’s underground,” he said. “With renewables, once the infrastructure is in place, it provides power for 20 to 30 years.”
Australia has a unique opportunity to capitalise on this shift. With large reserves of critical minerals — essential for clean technologies — the federal government’s Future Made in Australia policy aims to ensure that value-added manufacturing happens domestically, rather than simply exporting raw materials for refinement abroad.
Last year, clean tech contributed 10% to China’s GDP — illustrating the scale of economic potential in the clean energy transition.
Dr. Vivoda urged Australia to avoid becoming a mere supplier of raw materials. “We need to ask: How can we benefit from our role in global supply chains without just shipping resources offshore and seeing profits go elsewhere?”
