NZ fuel supply directly threatened by Hormuz crisis
Wise Response calls for rationing preparation
Press Release
FOR IMMEDIATE RELEASE
New Zealand’s Fuel Supply Under Direct Threat as Strait of Hormuz Crisis Deepens - Wise Response Calls for Immediate Action
3 March 2026 - The Wise Response Society is warning that the military conflict now disrupting the Strait of Hormuz poses a direct and immediate threat to New Zealand’s fuel supply, and is calling on the government to be transparent with the public about the severity of our exposure and to take concrete steps to prepare for what may be a prolonged disruption.
Since the closure of the Marsden Point refinery in 2022, New Zealand imports 100% of its refined fuel. Approximately 48% comes from South Korea and 33% from Singapore - both of which rely heavily on Middle Eastern crude oil, particularly from Saudi Arabia and the UAE. That crude reaches those Asian refineries through the Strait of Hormuz.
As of this weekend, following US-Israeli strikes on Iran and Iran’s retaliatory attacks across the Gulf region, the Strait of Hormuz is effectively closed to commercial shipping. Major shipping lines including Hapag-Lloyd and Maersk have halted or rerouted traffic. Vessels have been attacked. Maritime insurers are withdrawing cover. Over 80% of oil transiting the Strait is destined for the very Asian refineries that New Zealand depends on.
New Zealand is uniquely exposed. Unlike most OECD nations, we have no domestic refining capacity, no strategic petroleum reserve in the traditional sense, and we sit at the far end of the world’s longest supply chain. Our minimum stockholding obligation requires fuel importers to hold just 28 days’ cover for petrol and 21 days for diesel onshore - and even these figures may include fuel aboard tankers at sea that could be diverted or delayed in a crisis. The diesel reserve is not scheduled to increase to 28 days until July 2028.
These reserves were designed for short-term, orderly disruptions - not a shooting war in the world’s most critical energy chokepoint.
What Wise Response Is Calling For:
1. Immediate transparency. The government must be honest with New Zealanders about the severity of our fuel supply exposure. If this disruption persists beyond a few weeks, rationing becomes not just likely but necessary. The public deserves clear, accurate information now - not when queues form at petrol stations.
2. Activate the National Fuel Plan now. The government’s own Fuel Security Plan (November 2025) outlines contingency steps including activation of the Fuel Sector Coordinating Entity to lead disruption response. These mechanisms should be activated immediately and publicly, not held in reserve until a crisis is already upon us.
3. Investigate equitable rationing frameworks - including Tradable Energy Quotas. If fuel must be rationed, it must be rationed fairly. Price-only rationing means the wealthiest secure fuel while essential services, agriculture, freight, and lower-income households are left without. This is not hypothetical - it is the default outcome if no rationing framework is in place when shortages arrive.
Tradable Energy Quotas (TEQs), developed by the Fleming Policy Centre in the UK and endorsed by the UK All Party Parliamentary Group on Peak Oil, provide a proven model for fair, transparent energy rationing. Every citizen receives an equal basic energy entitlement; those who use less can sell their surplus; industry and government participate in the same system. TEQs are explicitly designed to handle both carbon reduction targets and fuel scarcity simultaneously.
Wise Response has consistently called for investigation of TEQs as a policy instrument for New Zealand, including in our August 2025 submission to the DPMC Long-term Resilience Briefing. The current crisis makes that call urgent.
4. Accelerate the structural transition away from imported fossil fuels. This crisis exposes what Wise Response has warned about for over a decade: New Zealand’s near-total dependence on imported hydrocarbons is a critical national security vulnerability. The long-term response must include rapid electrification of transport and industry, investment in decentralised domestic renewable energy systems, and planned reduction in aggregate energy demand - before it is forced upon us by events beyond our control.
The Broader Context
This crisis did not emerge from nowhere. Fossil energy is finite, and the best-quality, most accessible reserves have already been consumed. The escalating conflicts over remaining resources - whether in the Middle East, Ukraine, Venezuela or the South China Sea - follow a well-documented pattern of major powers competing for control of the energy that underpins their economies.
The popular assumption that renewable energy will seamlessly replace fossil fuels at the scale required to maintain current economic activity is not supported by the physics or the engineering evidence. The net energy (Energy Return on Investment - EROI) available from newer energy sources is structurally lower than what fossil fuels have provided for the last century. Renewables are essential, but they cannot replicate the energy density, portability, and embedded infrastructure of fossil hydrocarbons. Honest planning must start from this reality.
In our August 2025 submission on long-term resilience, Wise Response warned: “You can’t print energy. You can’t download resources. The era of cheap, high-return fossil fuels is over.” Six months later, with the world’s most critical energy chokepoint in flames, that warning could not be more relevant.
New Zealand has a narrow window to act - both in response to this immediate crisis and to begin building the resilient, lower-energy economy that our geography and circumstances demand.
ENDS
Contact: Nathan Surendran - Chairperson, Wise Response Society
Phone: 0212096286 Email: nathan@schema.nz
About Wise Response Society: Wise Response is a New Zealand incorporated society, founded in 2013, that calls on the government to formally assess the key risks to New Zealand’s future and to respond wisely. It brings together academics, engineers, and policy experts focused on the intersection of biophysical limits, climate change, and economic resilience. For more information and prior submissions, visit wiseresponse.org.nz.
Evidence and Sources Sheet
Supporting documentation for the Wise Response Society press release of 2 March 2026. Intended for journalists, editors, and policymakers to verify claims.
1. New Zealand’s Fuel Supply Chain
Marsden Point closure and 100% import dependency
Since the closure of New Zealand’s only oil refinery at Marsden Point in April 2022, all domestic petroleum needs are served by imports of refined products (petrol, diesel, jet fuel). NZ has zero domestic refining capacity.
MBIE - Oil Statistics: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-statistics/oil-statistics
Where NZ’s refined fuel originates
Korea provides 48% of the value of fuel imported into NZ (12 months to March 2025). Singapore provides 33%. Both countries’ refineries source crude from the Middle East, particularly Saudi Arabia and the UAE - via the Strait of Hormuz.
Infometrics - “Where does our fuel come from?” (May 2025): https://economics.infometrics.co.nz/article/2025-05-where-does-our-fuel-come-from
Fuel reserve levels (minimum stockholding obligation)
From 1 January 2025, fuel importers must hold: 28 days’ cover for petrol, 24 days for jet fuel, and 21 days for diesel. The diesel obligation increases to 28 days from July 2028 (for importers with >10% market share). These figures may include fuel in transit aboard tankers - supply that could be diverted or delayed during a major disruption.
MBIE - Fuel Security in New Zealand: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-generation-and-markets/liquid-fuel-market/fuel-security-in-new-zealand
MBIE - Fuel Security Plan (November 2025): https://www.mbie.govt.nz/assets/fuel-security-plan-november-2025.pdf
MBIE - Minimum Stockholding Obligation: https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-generation-and-markets/liquid-fuel-market/fuel-security-in-new-zealand/minimum-stockholding-obligation
Z Energy’s disruption modelling
Z Energy estimated that if NZ lost all supply from North Asia, it would have approximately 90 days petrol, 60 days jet fuel, and 50 days diesel from existing storage and remaining trade flows. Alternative supply chains from SE Asia could be established in ~30 days; from India/US/Middle East in ~50 days. Note: This analysis assumed an orderly single-source disruption - not a multi-front military conflict affecting the entire Persian Gulf region.
Newsroom - “Fuel importers ‘ready for international shocks’” (November 2024): https://newsroom.co.nz/2024/11/11/fuel-importers-ready-for-international-shocks/
Detailed NZ supply chain vulnerability analysis
Comprehensive analysis of NZ’s refined fuel dependency post-Marsden Point, including refinery configuration risk, EROI implications of lighter crude slates, and Middle Eastern supply chain exposure.
New Zealand Energy Substack - “2026 Energy Stock-Take – Part 3 – Refined Fuels”:
2. The Strait of Hormuz - Strategic Significance
Approximately 20% of global oil supply (~20 million barrels/day) and 20% of global LNG trade transits the Strait of Hormuz daily. Over 80% of crude transiting Hormuz is destined for Asian markets. China, India, Japan, and South Korea account for 69% of all Hormuz crude flows - these are the countries whose refineries supply New Zealand.
Only Saudi Arabia and the UAE have pipeline infrastructure capable of partially bypassing the Strait (combined ~2.6 million b/d spare capacity vs 15+ million b/d normally transiting by sea). No pipeline alternatives exist for LNG.
U.S. Energy Information Administration - Strait of Hormuz chokepoint analysis (June 2025): https://www.eia.gov/todayinenergy/detail.php?id=65504
Congressional Research Service - “Iran Conflict and the Strait of Hormuz: Oil and Gas Market Impacts”: https://www.congress.gov/crs-product/R45281
Logistics Middle East - “Measuring global supply chain reliance on Hormuz” (February 2026): https://www.logisticsmiddleeast.com/analysis/measuring-global-supply-chain-reliance-on-hormuz
3. Current Situation (as at 2 March 2026)
Following US-Israeli strikes on Iran (28 February 2026) that killed Supreme Leader Khamenei, and Iran’s retaliatory attacks across the Gulf:
Iran’s Revolutionary Guards have broadcast VHF warnings that no vessel may transit the Strait.
Ships have been attacked off the coasts of Oman and the UAE.
Hapag-Lloyd has halted all traffic through the Strait. Maersk has rerouted all vessels around the Cape of Good Hope.
Maritime security agencies report “significant military activity” in the Strait area.
Oil analysts warn Brent crude could reach $100+/barrel if disruption persists. Some scenarios project $200+ for a sustained closure.
Sources:
NZ Herald - “War paralyses global transit through Strait of Hormuz” (2 March 2026): https://www.nzherald.co.nz/world/war-paralyses-global-transit-through-strait-of-hormuz/MLJABR4WFFBCRJXWILA4KOVDMM/
Al Jazeera - “What is the Strait of Hormuz?” (2 March 2026): https://www.aljazeera.com/news/2026/3/1/how-us-israel-attacks-on-iran-threaten-the-strait-of-hormuz-oil-markets
CNBC - “$100 oil? Prolonged Hormuz closure could spark a 1970s-style energy shock” (1 March 2026): https://www.cnbc.com/2026/03/01/experts-weigh-potential-scenarios-for-oil-if-strait-of-hormuz-closes.html
Kpler - “US-Iran conflict: Strait of Hormuz crisis reshapes global oil markets” (1 March 2026): https://www.kpler.com/blog/us-iran-conflict-strait-of-hormuz-crisis-reshapes-global-oil-markets
Business Standard - “Strait of Hormuz explained” (2 March 2026): https://www.business-standard.com/world-news/what-is-strait-of-hormuz-iran-israel-conflict-war-global-oil-trade-supply-126030200176_1.html
New Zealand-specific coverage
The Spinoff - “With hundreds dead and the Gulf ablaze, is a muted NZ response enough?” (2 March 2026): https://thespinoff.co.nz/the-bulletin/02-03-2026/with-hundreds-dead-and-the-gulf-ablaze-is-a-muted-nz-response-enough
Sustainability Council of NZ - “An Oil Supply Crisis Could Trigger a Sovereignty Crisis for NZ”: http://www.sustainabilitynz.org/an-oil-supply-crisis-could-trigger-a-sovereignty-crisis-for-nz/
Scoop - “Road Freight Sector Watching Oil Prices As Middle East Conflict Continues” (2 March 2026): https://business.scoop.co.nz/2026/03/02/road-freight-sector-watching-oil-prices-as-middle-east-conflict-continues/
4. Equitable Rationing - A Primer on Tradable Energy Quotas (TEQs)
Why rationing matters now
When fuel becomes scarce, one of two things happens. Either it is rationed by price - meaning the wealthiest consumers and corporations secure what they need while essential services, agriculture, freight operators, and lower-income households go without - or it is rationed deliberately, through a framework designed to ensure fair access.
New Zealand currently has no such framework. If the Hormuz disruption persists and fuel shortages materialise, the default outcome is price rationing: pump prices spike, panic buying accelerates shortages, and those least able to afford fuel - including the rural communities, farmers, and freight operators our economy depends on - are left most exposed.
Wartime rationing systems in the UK and elsewhere demonstrated that equitable rationing, while unpopular in principle, dramatically outperforms unmanaged scarcity in practice. It maintained social cohesion, protected essential services, and actually improved nutritional outcomes for the poorest citizens. The question is not whether rationing is desirable - it is whether we prepare a fair system before it becomes necessary, or improvise one in crisis.
What are TEQs?
Tradable Energy Quotas (TEQs, pronounced “tex”) are an electronic energy rationing system designed by Dr David Fleming, first published in 1996 and developed over the following two decades with input from UK government departments, academic institutions, and the All Party Parliamentary Group on Peak Oil.
TEQs work as follows:
For individuals: Every adult receives an equal, free weekly entitlement of TEQs units, credited automatically to an electronic account (comparable to a bank card). When purchasing fuel or electricity, TEQs units are deducted alongside the monetary payment - automatically, at the point of sale. This is the only time individuals interact with the system. Those who use less energy than their entitlement can sell their surplus units on an open market. Those who need more can purchase additional units. The system is redistributive by design: since lower-income households typically use less energy, they gain a supplementary income stream by selling unused units.
For organisations: Businesses, industry, and government purchase their TEQs units at a weekly national auction (the “Tender”), or on the open market. They participate in the same system as individuals - there is one unified market and one price for units, preventing arbitrage between separate household and commercial schemes.
The national budget: The total number of TEQs units available nationally is set by an independent committee (analogous to New Zealand’s Climate Change Commission) based on either a carbon emissions reduction pathway, available fuel supply, or both simultaneously. The budget decreases over time in a planned, transparent staircase - giving all participants a clear long-term signal to reduce energy dependence.
The market mechanism: The price of TEQs units is set by supply and demand on the open market. If national energy demand is high relative to the budget, unit prices rise - creating a direct, visible incentive for everyone to reduce consumption. If demand falls (through efficiency, behaviour change, or fuel switching), unit prices fall. This creates a positive feedback loop: it becomes transparently in everyone’s interest to help each other reduce energy use.
Why TEQs, not carbon taxes or simple rationing?
Compared to carbon taxes: A carbon tax raises the price of energy for everyone equally, which disproportionately burdens the poor. TEQs guarantee a basic entitlement to every citizen regardless of income, and the tradability of units means those who use less are financially rewarded rather than simply paying less of a penalty.
Compared to non-tradable rations: Fixed, non-tradable rations have historically driven black markets and criminalised otherwise law-abiding people. TEQs legalise and formalise the exchange, while ensuring that total national consumption stays within the budget. Different vocations and circumstances require different amounts of energy - a farmer needs more fuel than an office worker - and tradability accommodates this without abandoning the principle of equal entitlement.
Compared to doing nothing (price rationing): Price rationing concentrates fuel access among those with the most purchasing power. It provides no mechanism for prioritising essential services, no floor for vulnerable households, and no national coordination. It is the worst-performing option in every historical comparison.
Political and academic track record
TEQs have been subject to extensive scrutiny:
2006: UK Government-commissioned scoping study by the Centre for Sustainable Energy concluded that personal carbon trading “has the potential to achieve emissions savings in a fairer way than carbon taxes.”
2008: Full UK Government pre-feasibility study across four reports. Headline finding: the system has potential but was “ahead of its time” relative to public readiness and implementation costs at that date.
2011: Endorsed by the UK All Party Parliamentary Group on Peak Oil, whose report stated: “TEQs provide the fairest and most productive way to deal with the oil crisis and to simultaneously guarantee reductions in fossil fuel use.”
2020: Peer-reviewed academic paper by Alexander & Floyd in Energies journal analysed TEQs through the lens of Joseph Tainter’s theory of societal complexity and collapse, concluding that TEQs offer a viable policy framework for managing energy descent equitably.
The system has never been implemented at national scale. However, the Fleming Policy Centre (which maintains the TEQs framework) notes that technological barriers identified in 2008 - particularly around electronic transaction infrastructure - have been comprehensively resolved by advances in digital payment systems since that date.
Applicability to New Zealand’s current situation
TEQs are designed for exactly the scenario New Zealand now faces: a nation confronting both immediate fuel scarcity and the longer-term reality of declining fossil fuel availability. The system could be deployed in two phases:
Immediate (crisis response): A simplified version covering liquid fuels only - petrol and diesel - to ensure equitable access during a supply disruption. This would function as a modernised, electronic version of wartime fuel rationing, with the added benefit of tradability to accommodate varying needs.
Longer-term (structural transition): A full TEQs system covering all fossil fuel energy, aligned with New Zealand’s emissions reduction targets and managed descent from fossil fuel dependence. This would provide the “fit for purpose” demand-side policy instrument that Wise Response has called for since its August 2025 DPMC submission.
Sources
Fleming Policy Centre - TEQs overview and FAQ: https://www.flemingpolicycentre.org.uk/teqs/
Fleming Policy Centre - “Energy and the Common Purpose” (booklet, PDF): https://www.flemingpolicycentre.org.uk/EnergyAndTheCommonPurpose.pdf
Fleming Policy Centre - Frequently Asked Questions on TEQs: https://flemingpolicycentre.org.uk/faqs/
Alexander & Floyd - “The Political Economy of Deep Decarbonization: Tradable Energy Quotas for Energy Descent Futures” (Energies, 2020, peer-reviewed): https://www.mdpi.com/1996-1073/13/17/4304
Wikipedia - Tradable Energy Quotas: https://en.wikipedia.org/wiki/Tradable_Energy_Quotas
degrowth.nz - TEQs for New Zealand: https://www.degrowth.nz/blog/teq
Lean Logic - TEQs entry (David Fleming’s extended analysis): https://leanlogic.online/glossary/teqs/
Wise Response prior advocacy
Wise Response has consistently advocated for TEQs as a policy instrument for New Zealand. In its August 2025 submission to the DPMC Long-term Resilience Briefing, the Society identified TEQs as the primary demand-side policy lever for managing energy descent, stating: “Of primary importance is a cross-party Energy Descent Action Plan leveraging ‘fit for purpose’ policy instruments like Tradable Energy Quotas (TEQs) to proactively manage our transition to a lower-energy society, avoiding the chaos of an unplanned collapse.”
Wise Response DPMC Submission (August 2025): http://bit.ly/wr_dpmcrd
5. Energy Transition - Physical Limits
Fossil fuels currently supply approximately 80% of global primary energy. The net energy (EROI) available from newer energy sources is structurally lower than what fossil fuels provided during the 20th century. This means the total surplus energy available to society will decline as the transition progresses, requiring either reduced aggregate consumption or increasing energy investment in energy production itself.
Renewable energy is essential, but cannot replicate the energy density, portability, and embedded infrastructure of fossil hydrocarbons at equivalent scale without fundamental changes to economic activity, consumption patterns, and expectations of material growth.
Sources:
Murphy - “Energy and Human Ambitions on a Finite Planet” (open access textbook): https://open.umn.edu/opentextbooks/textbooks/980
Hall & Klitgaard - “Energy and the Wealth of Nations” (Springer, 2018): https://link.springer.com/book/10.1007/978-3-319-66219-0
Moriarty & Honnery - “Switching Off” (Springer, 2022): https://link.springer.com/book/10.1007/978-981-19-0767-8
Schema Consulting Whitepaper: The Limits to the Energy Transition: What Physics Means for New Zealand’s Economy - Google Docs (whitepaper, March 2026)
6. Wise Response Background
Wise Response Society was founded in 2013 and has made submissions to Parliament, government agencies, and local bodies on energy security, climate risk, and biophysical limits for over a decade. Key prior work includes:
Wise Response Manifesto 2025: https://wiseresponse.substack.com/p/manifesto-of-the-wise-response-society-666
Submission to DPMC Long-term Resilience Briefing (August 2025): http://bit.ly/wr_dpmcrd
Submissions on the Fast-track Bill, National Climate Change Risk Assessment, and National Fuel Plan via the website:
This evidence sheet is intended for journalists and policymakers to verify claims made in the accompanying press release. All sources are publicly accessible unless otherwise noted. For further information or expert comment, contact the Wise Response Society via the details above.
Not a jot of wisdom in the government or the media, consequently the masses who are kept asleep. Meanwhile the Australians put out warnings and the Japanese worry they only have 250 days of reserves.