Pacific Island governments are urging their citizens not to panic about the supply of fuels amid the conflict in the Middle East between Israel, the United States and Iran.

The conflict has resulted in the closure of the Strait of Hormuz, a vital shipping route that carries around 20 percent of the world’s oil (20 million barrels a day), by Iran’s Islamic Revolutionary Guard Corps (IRGC).

The IRGC has warned that any ship passing through the strait would be attacked, triggering a near-total halt in vessels attempting to pass through the waterway, causing a surge in oil prices.

However, according to Iran’s Foreign Minister Abbas Araqchi, the Strait of Hormuz is closed only to Iran’s “enemies and their allies”, the IRGC-aligned Tasnim News Agency reported.

US President Donald Trump has demanded that allies send naval vessels to the Middle East to help escort ships through the strait.

Pacific Islands nations get nearly all of their refined fuel from refineries in Singapore, South Korea and Japan. But roughly 80 percent of the crude oil used by these Asian refineries passes through the Strait of Hormuz.

The Fiji government said on Monday that fuel supplies in the country were sufficient to meet energy needs for the next few months.

“There is no need to indulge in ‘panic buying’ at the service station,” it said in a statement.

Closely monitoring the war
It added that the government was closely monitoring the US-Israel war on Iran, and meeting with local suppliers who had already secured fuel supplies.

Prime Minister Sitiveni Rabuka and his cabinet were meeting today “to firm-up on the plan of action for the long-term, if there is no resolution to the conflict in the near future”.

Tonga’s government has also called on Tongans not to queue at petrol stations.

“There is no immediate need for concern or panic buying of fuel,” the Tonga Prime Minister’s Office said in a statement.

“We are assured by the energy sector that there is sufficient fuel available for now.”

Samoa’s Prime Minister Laaulialemalietoa Leuatea Polataivao Schmidt said his government’s immediate priority was to ensure that the country had enough fuel supply to meet its needs.

“What is happening . . .  we can’t control, but we are working to ensure we have enough fuel for the next one or two years because we do not know what’s going to happen next,” La’auli said during a joint press conference with New Zealand Prime Minister Christopher Luxon yesterday.

Current stocks sufficient
Vanuatu’s government said it has engaged with Pacific Energy, Vanuatu’s primary fuel importer and supplier, to assess potential impacts on national fuel supply.

“Pacific Energy reports current stocks are sufficient to cover usual consumption, the company’s supply programme, based on a three-month rolling forecast, is secured, and no shortages are anticipated in the foreseeable future,” the Ministry of the Prime Minister in Vanuatu said in a statement.

In the Solomon Islands, the country’s central bank said that while the fuel prices at the petrol stations were currently stable, “the impact of the oil price shock is expected to be felt from April 2026 onwards”.

“Preliminary assessment indicates that sustained increases in global oil prices are likely to push up domestic fuel costs, thereby feeding into higher imported inflation and overall headline inflation,” the Central Bank of Solomon Islands said in a statement.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Analysts are warning fuel prices are expected to jump in the Pacific following the Israeli and US attacks on Iran, and the retaliatory response by Iran.

Iran borders the Strait of Hormuz, which carries 20 percent of the world’s oil and gas supply, and shipments have been suspended following the attacks.

Crude oil prices could climb as high as US$100 per barrel, leading to widespread concerns the Middle East war could precipitate into “a global energy crisis”.

Pacific Island fuel prices are generally high and volatile due to import dependency and shipping distance.

Saul Kanovic, an energy sector analyst at MST Financial in Sydney, told RNZ Pacific the “threat is severe”.

“If the situation doesn’t de-escalate and the passage through [the Strait of Hormuz] remains significantly disrupted, we’re looking at a global energy crisis that we haven’t seen since the 1970s,” Kanovic said.

“This could be bigger than that.”

Isolated nations suffer
Kanovic said that more isolated nations with less diversified economies would suffer from a greater exposure to these price shocks.

“Cost of transport is going to go up from a fuel cost perspective, but we might also see insurance premiums rising.”

In the Pacific, imported fuel is usually paid for by forward contracts in advance, and in bulk orders that can last months, as a hedge against price shocks.

But the impact could embed itself into freight costs, both for shipping and air, which in the Pacific is already relatively high given the distance.

Glen Craig, Vanuatu’s special envoy for international development, told RNZ Pacific the severity of the impact would depend on whether the duration of the conflict outpaced a Pacific nation’s petroleum reserves.

Not yet ‘panicking’
“No one is panicking now, but there is definitely going to be some fuel price increases at some stage,” Craig said.

“We should be okay, but it depends on how big and how long this conflict is going to go for.”

When it hits, Craig said it would likely be reflected in all imported goods on Pacific shelves, as well as tourism and regional travel.

“It’s a bit like if you’re on a busy motorway, and there’s an accident on the road 30 km ahead; it might take half an hour to trickle down to the end, but it eventually gets to you.”

“I would dare say we’re looking at something in maybe four months’ time.”

Papau New Guinea set to ‘definitely benefit’ – minister
Papua New Guinea’s Foreign Minister Justin Tkatchenko saw some potential upside for his country as a petroleum and oil exporter.

“It will definitely benefit PNG, but then there’s the other side, where fuel prices for the domestic market will then go up,” Tkatchenko said.

PNG is predominantly a petroleum gas exporter, with China, Japan and Taiwan as its biggest importers.

With LNG prices impacted by the Middle East, but PNG protected by distance, it leaves a shortage that they can fill.

“Unfortunately, it’s the consumers that will cop it, the people, and they are the ones that end up paying for it,” Tkatchenko said.

“So yeah, it’s good in one way, but definitely won’t help out people in the long run.”

A higher price means a higher tax take. According to its 2025 budget, PNG’s mining and petroleum tax drew in roughly US$971 million, a 16.5 percent increase from 2024.

The MPT, which is linked to gains from the sale of mining and petroleum goods, comprises PNG’s second largest source of tax revenue.

It may put the government in a position where it can commit to supporting consumers through any eventual price shock, as Prime Minister James Marape told local media over the weekend.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz