Australia faces diesel price spike as US export curbs are considered

Australian diesel prices could rise above $3 a litre if the Trump administration moves ahead with a ban on US diesel exports, according to market reporting on Thursday. The warning comes as fuel costs climb amid disrupted global supply and renewed pressure on international oil markets. Canberra is currently recording the highest diesel price among the capital cities, at 298.7 cents per litre.

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The same reporting said unleaded petrol in Canberra was priced at 250 cents per litre, while diesel prices in other cities were not far behind. Prices have risen by nearly 40 cents a litre since the start of the month, adding about $22 to the cost of filling a 55-litre tank. Service stations have been passing on higher costs from international refineries as supply tightens.

The immediate pressure on fuel markets is being linked to ongoing hostilities in the Middle East, which have restricted the movement of fuel tankers through the Strait of Hormuz and the Bab al-Mandab chokepoint. Brent crude has remained above US$100 a barrel for most of the past fortnight and reached its highest level since May. The reporting also said Ukrainian attacks have cut off Russian supply, further limiting global oil flows.

Australia is especially exposed because it relies heavily on imported diesel. Government data cited in the report showed the country imported more than 18,400 million litres of diesel from January to July 2026, with only 510.9 million litres coming from the United States. Most of that US supply arrived in April, underscoring how dependent the market is on overseas shipments and international refinery output.

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The possible US export ban is being considered by the Trump administration as a way to hold down domestic fuel prices ahead of the November midterm elections. Analysts quoted in the report said the United States has become a larger diesel supplier since the war began, exporting more than 1.5 million barrels a day. That means any restriction could have consequences well beyond the US market, including for import-dependent countries such as Australia.

What happens next will depend on whether Washington proceeds with export limits and whether global supply conditions improve. Analysts cited in the report warned that shortages could deepen quickly if exports are curtailed, with one suggesting Australia could face rationing and prices above $4 a litre within weeks. The scale of the impact will also depend on how long Middle East disruptions continue and whether alternative supply can be secured.

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