Motorists warned the price of fuel is set to rise on the latest Iran-Israel conflict

Australian motorists will “inevitably” pay more when they fuel up their cars in the coming days, as energy producing stocks soar from the fallout in the Middle East. Futures markets for Brent oil have spiked in recent days and are now buying $US77 a barrel, when it was just over $US65 this time last week. It comes as tensions out of the Middle East flare up, after Israel undertook pre-emptive attacks on Iran. It said the strikes were aimed at eliminating Iran’s nuclear program and ballistic missile capabilities. Iran has fired missiles back at Israel in response. Deputy Prime Minister Richard Marles said on Monday it was “inevitable” Aussies will have to pay more at the pump. Mr Marles said the extent of the impact hostilities would have on Australia’s economy “depends a bit on how long the conflict goes and the way in which it plays out”. But he said it was “right to focus on fuel”. “Already we have seen over the course of the last few days the global oil price go up and it’s the inevitable consequence of any conflict,” Mr Marles said. Treasurer Jim Chalmers warned the latest global conflict could have further impacts on the Australian economy. Mr Chalmers said inflation could rise on the back of higher oil prices, but he wasn’t expecting rate decisions to be affected. “Higher oil prices do pose a risk to the inflation outlook but they also pose a risk to global growth,” he told ABC on Monday afternoon. “Typically what reserve banks do, central banks, not just our own, but they try and look through temporary spikes in prices, and to consider the broader implications.” He said the “global economy is a pretty dangerous place right now”, pointing to other issues including trade uncertainty and the ongoing Ukraine conflict. “Australia is well-placed and well prepared to deal with all of this uncertainty and volatility, but we won’t be immune from it,” he said. “So all the advice I am getting is that the best defence against this global economic volatility is a stronger economy.” He said his speech to the National Press Club on Wednesday would be about the government’s productivity agenda but also on how the government is working to shore up the budget. “It will also be focused on budget sustainability and also how we make our economy more resilient in the face of all this global uncertainty,” he said. AMP chief economist Shane Oliver wrote in his latest economic note fuel prices could be on the rise for motorists, but how much they pay will depend on how long oil prices remain higher. “Oil prices were already rising this month on signs of increasing risks and have spiked further – with the rise so far this month threatening a flow of around 12 cents a litre for Australian petrol prices if sustained at these levels,” he said. While motorists could be paying more to fuel up their car compared with the start of May when oil was at $US65 a barrel, Janus Henderson investment portfolio manager Oliver Blackbourn said the recent spike is still within the usual range for oil. “The price of a barrel of oil had ranged between $70 and $90 through 2024, to put the recent moves in context,” he said. “This period includes prior exchanges of strikes between Israel and Iran, and is still far below the levels above $100 per barrel in the wake of the Russian invasion of Ukraine in early 2022.” Mr Blackbourn said any further moves in the price of crude oil will be dependent on what happens next in the Israel-Iran conflict. On the ASX, the energy sector was up 5.7 per cent amid the higher oil prices and a takeover bid from Abu Dhabi state owned company logging a $30bn bid for Santos. Shares in Santos soared 11.87 per cent to $7.78 after the takeover announcement. Oil and gas giant Woodside jumped after the opening bell and is up more than 3.3 per cent to $26.05 at the time of writing due to the increase in oil prices. Petrol and diesel producer Ampol also climbed 1.70 per cent to 426.25 while Woodside was also rallying on Monday, up 3.1 per cent, petrol and diesel producer Ampol climbed 1.9 per cent and Beach energy shares are up 2.69 per cent to $1.33.