This fuel is either in New Zealand, within our Exclusive Economic Zone (New Zealand waters) – which includes ships with fuel unloading, ships at berth yet to unload, and ships moving between ports – or on water outside the EEZ up to three weeks away.

Strait of Hormuz and Shipping Flows
The Strait of Hormuz remains the central constraint on global trade flows, with conditions becoming more volatile. Iran has reportedly increased its defensive posture, including the placement of additional mines, and has reasserted control over vessel movements through the Strait. At the same time, the United States blockade on Iranian ports remains in place, alongside broader enforcement actions such as the seizure of Iranian-linked vessels beyond the immediate region. 

New Zealand remains engaged in international efforts to restore freedom of navigation, including participation in a UK and France-led initiative involving around 50 countries.

According to the Strait of Hormuz Traffic Live Vessel Tracking, as of May, shipping through the Strait of Hormuz has essentially come to a standstill following the US naval blockade and Iran’s restriction of foreign vessels.

Global energy markets
Global energy markets are reflecting sustained disruption, with pricing pressures becoming more entrenched. While alternative supply routes and increased production from countries such as the United States and Saudi Arabia have mitigated some impacts, they are not sufficient to fully offset disruption from the Middle East.

There is increasing evidence that a structural price premium may persist beyond the conflict, with higher baseline energy costs likely to carry into the medium term. Demand is adjusting in more price-sensitive economies, contributing to a constrained but functioning market. Markets are also showing fewer sharp reactions to developments, suggesting some level of adaptation, but uncertainty remains high. Inflationary pressures are building, and elevated fuel costs combined with weaker confidence are expected to delay economic recovery both in New Zealand and globally.

New Zealand Fuel Supply Position
Domestically, supply chains continue to perform well, with no immediate signs of systemic disruption. Fuel supply remains stable, with shipments arriving as expected and overall supply levels considered healthy. Short-term availability of key inputs such as fertiliser and plastics is also secure, reflecting forward planning and existing procurement arrangements.

The situation is expected to remain primarily a price-driven challenge rather than a supply-driven one in the near term. However, work is ongoing to refine the fuel response framework, including providing greater clarity on rationing and priority allocation should conditions deteriorate. This includes incorporating industry feedback to ensure any future interventions are targeted and practical.

Trade and Export Impacts
The impact on exporters is becoming more evident, particularly at the firm level. While some exporters remain relatively unaffected, there is a clear trend of increasing disruption, with more businesses experiencing partial impacts over time. This reflects both direct exposure to affected markets and indirect effects through global supply chain disruption.

Demand conditions in the Middle East are softening, and there is evidence of global trade flows shifting, with some exporters redirecting product to alternative markets. Exporters are also facing increased operational complexity, as longer shipping times, uncertain logistics, and changing market conditions require more active management.

Commercial pressures are intensifying. Payment terms are tightening in some cases, placing strain on working capital, while rising input and freight costs are flowing through to business balance sheets. Firms are absorbing costs where possible, but there are limits before these increases are passed through supply chains and onto consumers.

Supply Chains and Key Inputs
Supply chains remain intact, but pressure is building across key inputs. There are no systemic shortages at present, but the cumulative impact of rising costs across multiple inputs is becoming more significant. This compounding effect is likely to place increasing pressure on margins and operational decisions if elevated cost conditions persist.

International Engagement and Strategic Outlook
New Zealand continues to engage actively with international partners to support supply chain resilience. This includes coordination with key fuel suppliers such as Singapore, South Korea, and Malaysia, as well as broader engagement with Australia, Pacific nations, and Gulf States. Efforts are also focused on supporting multilateral initiatives to reopen critical shipping routes and maintain freedom of navigation.

Looking ahead, two broad pathways remain: a negotiated settlement or further escalation, including potential military action. At the same time, evolving geopolitical dynamics and differing strategic interests across the region add complexity to the outlook and reinforce the likelihood of ongoing uncertainty.

Regulatory and market conduct – Commerce Commission work
There is increased attention on pricing behaviour and market conduct. Monitoring indicates that fuel price increases in New Zealand are broadly consistent with underlying cost movements, with no evidence of unjustified surcharges at this stage.

Businesses are reminded that any surcharges must be transparent, have a clear contractual basis, and be able to be substantiated. Importantly, pricing adjustments must be reversible, and temporary increases should be removed when cost pressures ease.

As businesses consider how to respond to the current environment, there is growing interest in collaboration to manage costs and maintain supply.

If a business considers that collaboration with another business is necessary, it should engage with the Commerce Commission early to ensure compliance with the Commerce Act. Click the link here for information.