Australia may be entering a decisive phase for fuel prices with global oil market shocks posing fresh risks for motorists and broader inflation.

Experts say recent European Union and United States sanctions on Russian oil, combined with disruptions to Russian refining and shipping operations, could drive crude benchmarks and downstream fuel costs in Australia upwards.

Australia’s underlying inflation rose by 1.3 per cent in the September quarter and 3.2 per cent over the year, the first annual increase since late 2022 — when the full-scale Ukraine conflict triggered a spike in energy prices.

The surge in transport and power costs remains a key driver of price pressures.

Although Australia sources limited crude directly from Russia, shifts in global trade flows matter — analysts note that Australian pump prices often respond to movements in the Asian refined-product benchmark with a lag of just a few weeks.

Brent crude has already climbed from near US$55 a barrel in September to about US$65–66, according to recent market data.

Industry rule-of-thumb suggests a one-dollar move in crude corresponds to roughly a one-cent change at the bowser.

The Australian Competition and Consumer Commission observes that retail fuel prices are driven principally by international refined prices and the Australia–US dollar exchange rate, and that movements typically filter through to major cities within two weeks.

The sanctions on Russian oil include Australia lowering its price cap for Russian crude to US$47.60 a barrel and listing an additional 95 vessels in the Russian “shadow fleet” used to evade sanctions.

Meanwhile, disruption to Russian refining — including drone attacks and export bans — has removed more than a third of Russian capacity, adding to global uncertainty.

But the International Energy Agency cautions that surplus production capacity in the oil market should limit sustained price spikes.

Australia’s fuel dependence and limited buffer make the country particularly exposed: imports account for about 91 per cent of fuel use and storage equates to only around 49 days of net imports — well below the International Energy Agency standard of 90 days.

Most refined imports flow from Singapore, South Korea and Japan, meaning shifts in Asian refiners’ sourcing can quickly ripple to Australian distributors.

Should the global impact of sanctions deepen, import-handling costs and insurance premiums may rise, freight rates may climb and refining margins expand — all factors liable to elevate pump prices ahead of peak summer travel.

With drivers, transport-intensive businesses and consumers in mind, the message from market watchers is clear: Australia appears poised at a fuel-price turning point and the next few weeks may be key in determining how high and how fast costs rise.