Australian motorists are finally seeing relief at the petrol pump, with NRMA figures showing the national average for regular unleaded has fallen by almost 22 cents since late October to $2.23 a litre. Diesel has dropped by more than 20 cents to $2.71 a litre, and some service stations are now selling unleaded below $2.
The falls, the first since August, follow a 20 per cent drop in the cost of Tapis crude, Australia's regional oil benchmark, over the past fortnight. The price retreat comes as markets respond to a long-awaited lift in Middle East oil shipments and signs from US President Donald Trump that he wants to de-escalate the Iran war after his party's losses in the midterm elections.
The conflict in Iran, now in its ninth month, had crippled oil flows through the Strait of Hormuz, a narrow waterway that normally carries about one in five of the world's oil tankers. Brent crude, which traded at nearly $US120 a barrel in late October, has fallen as low as $US90 this week. Oil companies in Saudi Arabia and other Gulf states have diverted volumes via pipelines to other ports.
NRMA spokesperson Peter Khoury welcomed the price retreat but cautioned that motorists are not out of the woods. 'Prices at home are falling and that is great news for families struggling with cost-of-living pressures,' he said. But the national average for unleaded remains almost 58 cents a litre higher than before the conflict began. 'We desperately need pre-war prices to return, but to get there we need a permanent peace with the Strait of Hormuz reopened to unrestricted trade.'
Claudio Galimberti, chief economist at research firm Rystad Energy, said the US midterm result had triggered one of the sharpest repricing events for oil in years, but warned that markets were treating the Democratic victory as though it had resolved the Iran situation. 'It has not,' he said. 'What has changed is the political cost of further escalation, not the geopolitical reality on the ground.'
The Commonwealth Bank said monthly oil flows out of the Middle East had been ranging between 80 and 90 per cent since late September. The NRMA also found price gaps of up to $1.06 a litre between the cheapest and most expensive fuel available in Sydney, Melbourne and Brisbane, and urged motorists to shop around.
Analysis
Why This Matters
- Australian households struggling with high living costs get some relief at the bowser after months of elevated fuel prices.
- The price drop signals that financial markets expect a de-escalation of the Iran war, but the situation remains fragile.
- If peace does not hold, prices could spike again quickly, as the conflict's impact on supply chains is not resolved.
Background
The Iran war, launched by the US and Israel in February, disrupted oil shipments through the Strait of Hormuz, a narrow waterway that normally carries about one in five of the world's oil tankers. Oil prices surged and Australian petrol prices rose sharply. In November, Brent crude fell from nearly $US120 a barrel to around $US90, and Tapis crude dropped by 20 per cent, as markets responded to increased Middle East oil output and signs that the Trump administration might pursue de-escalation following the Republican party's losses in the US midterm elections.
Key Perspectives
NRMA spokesperson Peter Khoury: Welcomed the price falls as great news for families but stressed that prices remain well above pre-conflict levels and will not return to normal without a permanent peace and the Strait of Hormuz fully reopened.
Rystad Energy chief economist Claudio Galimberti: Called the market reaction a repricing event driven by the political cost of further escalation, not a change in the geopolitical reality; the underlying risk of disruption remains.
What to Watch
- Whether the Trump administration follows through on signals of de-escalation and whether any peace deal emerges.
- The Strait of Hormuz shipping volumes: full reopening would signal a sustained supply recovery.
- Oil price movements: if Brent crude stabilises or rises again, it may indicate that the market repricing was premature.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedNRMA spokesperson Peter Khoury said prices falling was good news for families struggling with cost-of-living pressures.WA Today - Latest News: ““Prices at home are falling and that is great news for families struggling with cost-of-living pressures and an over-heated economy,” he said.”
- SupportedPeter Khoury said motorists needed pre-war prices and a permanent peace with the Strait of Hormuz reopened to unrestricted trade.WA Today - Latest News: “”We desperately need pre-war prices to return, but to get there we need a permanent peace with the Strait of Hormuz reopened to unrestricted trade,” Khoury said.”
- SupportedClaudio Galimberti said “It has not” and that what had changed was the political cost of further escalation, not the geopolitical reality on the ground.WA Today - Latest News: ““It has not,” he said. “What has changed is the political cost of further escalation, not the geopolitical reality on the ground.””
- SupportedPetrol prices are tumbling as global oil costs fall, bringing relief to Australian motorists.WA Today - Latest News: “Australian motorists are finally seeing some relief at the petrol pump, new analysis shows, as steep falls in global oil prices start flowing through to service stations”
- SupportedThe national average for regular unleaded fell almost 22 cents since late October to $2.23 a litre.WA Today - Latest News: “the national average for regular unleaded has fallen by almost 22¢ since late October to $2.23 a litre.”
- SupportedDiesel prices fell by more than 20 cents to $2.71 a litre.WA Today - Latest News: “Diesel prices, meanwhile, have fallen by more than 20¢ to $2.71 a litre.”
- SupportedThe price falls were the first since August.WA Today - Latest News: “For the first time since August, average petrol and diesel prices have started to tumble nationwide”
- SupportedTapis crude fell 20 per cent over the past fortnight.WA Today - Latest News: “driven by a sharp 20 per cent drop in the cost of Tapis Crude, Australia’s regional oil benchmark, over the past fortnight.”
- SupportedMarkets were responding to a lift in Middle East oil shipments.WA Today - Latest News: “The price retreat comes as markets are responding to a long-awaited lift in Middle East oil shipments”
- SupportedMarkets were responding to signs Donald Trump wanted to de-escalate the Iran war after his party’s midterm election losses.WA Today - Latest News: “and signs that Donald Trump wants to de-escalate the Iran war following his party’s heavy losses in the United States midterm elections.”
- SupportedBrent crude, nearly US$120 a barrel at the end of October, fell as low as US$90 a barrel that week.WA Today - Latest News: “Brent oil, the global benchmark for crude, which was trading at nearly $US120 a barrel at the end of October, has fallen as low as $US90 a barrel this week.”
- SupportedThe Iran conflict had crippled oil flows through the Strait of Hormuz, which usually carries about one in five of the world’s oil tankers.WA Today - Latest News: “While the conflict has crippled oil flows through the Strait of Hormuz, a narrow waterway off Iran’s coastline that usually carries about one in five of the world’s oil tankers”