Brent crude oil prices have surged above US$112 per barrel, rising more than 4% in a single session and approximately 55% over the past month.
The increase comes as global supply tightens and disruption risks return across key oil-producing regions, namely the Middle East.
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Australia relies heavily on imported fuel
Australia produces oil, but imports most of its refined fuel. Over the past two decades, domestic refining capacity has declined, with much of the country's petrol and diesel now sourced from Asian refineries.
This has increased reliance on global supply chains, with limited domestic refining to fall back on.
As a result, domestic fuel prices closely track global benchmarks such as Brent crude, with changes flowing through quickly.
Geography adds another layer of risk
Australia's location adds to the challenge. Fuel has to be shipped long distances before reaching domestic terminals and retail networks, which increases both costs and time.
Delays in shipping, tighter freight capacity, and congestion at key routes can all push costs higher.
The distribution task does not end once it reaches the coast. Fuel still needs to be transported across a large and sparsely populated country, adding further pressure to the system.
These factors mean supply disruptions can take longer to work through locally, with a more noticeable impact on prices.
Prices sit mid-range globally
On a global scale, Australia's fuel prices sit around the middle range of developed markets. While they are generally lower than in some parts of Europe, prices are higher than in the United States, where domestic supply is stronger.
Even so, changes in crude oil prices still show up quickly at the pump.
Recent data shows domestic prices rising sharply over a short period, tracking moves in global markets. The pace of these increases is what really stands out most.
A market shaped by external forces
Australia's fuel market is largely shaped by global conditions rather than domestic supply. This leaves it more exposed to swings in international markets, especially during periods of geopolitical tension.
With Brent crude now above US$112, recent price moves show how quickly global shifts can feed into local fuel costs.
These same conditions are also reflected in the share prices of energy producers such as Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO). Their performance is closely tied to movements in global oil markets.
Australia's reliance on imports means that global disruptions will always have a more direct impact than other countries.
