Your Petrol Bill Just Became a Geopolitics Problem

Remember when petrol was $2.50 a litre and we thought that was outrageous?

Good times.

As of this week, 91 octane is sitting around $3.24 a litre. Diesel nearly doubled earlier this year. And the reason has nothing to do with New Zealand — it has everything to do with a narrow strip of water on the other side of the planet that most Kiwis couldn’t point to on a map.

What happened

In late February, the US and Israel launched airstrikes on Iran. Iran responded by effectively closing the Strait of Hormuz — the 33km-wide chokepoint between Iran and Oman that carries roughly 20% of the world’s oil supply.

Overnight, global oil markets went haywire. Brent crude spiked to nearly US$150 a barrel. The IEA called it “the largest supply disruption in the history of the global oil market.” Shipping through the strait dropped to three vessels a day, down from dozens.

New Zealand — a small island nation at the bottom of the Pacific that imports virtually all of its fuel — felt it immediately.

Trump is “winning”

Meanwhile, the architect of the strikes has been busy declaring victory. Trump’s strategy, as far as anyone can tell, is to escalate first, promise to fix it later, and then take credit when things partially stabilise.

First came peace talks. They failed. So Trump did what Trump does — he escalated again. On April 13, he imposed a full naval blockade on Iran’s entire coastline. CENTCOM warned that any vessel “entering or departing the blockaded area without authorization is subject to interception, diversion, and capture.” Since then, the US has forced 49 commercial vessels to turn back.

Then came “Operation Project Freedom” — guided-missile destroyers, 100+ aircraft, drones, and 15,000 service members deployed to escort neutral tankers out of the strait. Iran’s response? “Any foreign armed forces will be attacked if they intend to approach and enter the Strait of Hormuz.”

So the plan to fix the crisis he started… is to blockade the blockade. Genius.

Oil has come down from its $150 peak — Brent is sitting around US$115 a barrel as of this week — but that’s still nearly double what it was six months ago. Analysts are forecasting $115-$135 through May alone, with no resolution in sight.

The tariff situation isn’t helping either. Trump’s trade war has slowed global economic growth, which is projected to reduce oil demand — but the supply disruption from Hormuz has overwhelmed any demand-side relief. So we get the worst of both worlds: a slowing economy AND expensive fuel.

All that winning.

What it means for New Zealand

Here’s the uncomfortable truth: New Zealand has very little control over any of this. We don’t produce meaningful amounts of oil. We don’t have strategic reserves worth talking about. We are largely at the mercy of global oil markets, Middle Eastern geopolitics, and whatever mood the US President is in on any given Tuesday.

The government knows it, too. Yesterday, PM Luxon signed a first-of-its-kind deal with Singapore — the Agreement on Trade in Essential Supplies — committing both countries to keep fuel, food, and other essentials flowing during crises. NZ imports about a third of its refined fuel from Singapore. In return, Singapore relies on us for about 14% of its food. “We have each other’s backs,” Luxon said.

It’s a smart move. But it’s also an admission: New Zealand is so exposed to global oil supply that we needed an emergency trade treaty just to make sure the diesel keeps coming for our farms.

The RBNZ has been blunt — the oil shock will push inflation higher and slow our economic recovery through 2026. Petrol has come down from its March peak (we’re no longer at $3.50), but with Brent still at US$115 and forecasts ranging up to $135 through May, nobody’s popping champagne. If Operation Project Freedom goes sideways — and Iran has explicitly threatened to attack US ships — we’re back to panic pricing overnight.

The Waikato Chamber of Commerce summed it up nicely: “The era of cheap, stable fuel is over.”

So… can we trust the price to come back down?

It already has — a bit. We’re not at the $3.50 peak anymore. The naval escort operation and the Singapore deal have helped calm things slightly.

But here’s the thing: oil is still at US$115 a barrel. That’s nearly double where it was before the strikes. And the “solution” currently keeping prices from going higher is a standoff between the US Navy and Iran in a 33km-wide strait, with both sides threatening to shoot at each other.

Does that sound stable to you?

Even if the Hormuz situation fully resolves — and that’s a big if — the structural vulnerability doesn’t go away. One geopolitical crisis, one war, one tanker getting hit in the wrong place, and we’re right back here. It happened in 2022 with Russia and Ukraine. It happened in the 1970s with the OPEC embargo. And it’ll happen again. The only variable is when.

If your household budget depends on the Strait of Hormuz staying open, the US Navy not getting shot at, and Donald Trump making sensible decisions… you might want a Plan B.

The Plan B

New Zealand EV sales are up 278% year-on-year. In March alone, new EV registrations jumped from 642 to 2,370. EVs now make up nearly half of all new cars sold in New Zealand. BYD sales are up 540%.

Kiwis are getting the message: the best way to insulate yourself from global oil chaos is to stop needing oil altogether.

And here’s the part most people don’t know: you can finance an EV through your home loan at 0% interest.

Westpac offers 0% for 5 years on EV finance, up to $50,000. ANZ, BNZ, and ASB offer 1% for 3 years, up to $80,000. It’s added as a separate split on your mortgage — your existing home loan terms don’t change.

Compare that to dealer finance at 10% — on a $40,000 car, you’d pay over $15,000 in interest through a dealer. Through your home loan with Westpac? Zero.

The maths

Let’s say you’re spending $60 a week on petrol right now. That’s $3,120 a year.

Switch to an EV, and your electricity cost for the same driving distance is roughly $10-$15 a week. Call it $650 a year.

That’s $2,470 a year back in your pocket — just on fuel.

Finance a $35,000 EV through Westpac at 0% over 5 years. Your weekly repayment is $135. You were spending $60 a week on petrol anyway, so the real net cost is $75 a week. And after 5 years, the car is paid off and your transport cost drops to $12 a week.

Meanwhile, the petrol driver is still at the mercy of whatever’s happening in the Strait of Hormuz.

The takeaway

You can’t control global oil markets. You can’t control what happens in the Middle East. You definitely can’t control what Trump does next.

But you can control what powers your car. And right now, NZ banks are basically paying you to make the switch — 0% interest, no deposit, through your existing home loan.

The fuel crisis will pass. Until the next one. The question is whether you’ll still be in the queue at the petrol station when it hits.

Want to check if you qualify for 0% EV finance?

Free, no obligation. We’ll tell you straight whether the numbers work — or whether you’re better off waiting.