Diesel Supply Risk - News Roundup
Overview and Week of 14–20 July 2025
I’ve been tracking diesel supply challenges via an informal reading of a wide variety of sources for a few years new, and I’ve decided to set up an automated search and share the output here weekly-ish for subscribers to grok and (hopefully) share. Firstly from my perspective, here’s why it matters:
🛢️ Diesel Supply Overview: Why It Matters Globally, and Locally
1. Global Context: Energy Disruptions & Diesel Constraints
We’ve entered an era of persistent energy disturbances—not just spikes like in the 1970s, but prolonged volatility across oil, gas, coal, and electricity markets (BiophysEco). Recent data shows that diesel supplies worldwide are lagging behind demand, with per-capita supply declining since 2014 (Our Finite World). As Gail Tverberg writes:
“The world’s per capita affordable supply of diesel has been declining, especially since 2014.” (Our Finite World)
This puts pressure on industries from agriculture to shipping, and tightens the global supply chain.
2. Australia: High Import Reliance on Middle Eastern Oil
Australia now imports around half of its diesel indirectly from Middle East crude, often routed via refining hubs in East Asia (crudeoilpeak.info). As CrudeOilPeak.info highlights:
“Except for occasional imports from the UAE, Australia’s crude imports are not dependent on the Middle East…[but] Malaysia, Vietnam and Brunei are themselves dependent…may be reluctant to export crude to Australia in case of shortages.” (crudeoilpeak.info)
This creates layered vulnerability—first to Middle Eastern production, then to supply changes in Asia.
Meanwhile, Australia’s refinery closures—such as Sydney and Brisbane—have shifted it from domestic refining to fuel import dependence. Without active policy, both countries may face disruptions if global flows falter.
3. New Zealand After Marsden Point: Energy Security on the Edge
New Zealand is reviewing its diesel resilience and planning a biofuel mandate, but decisive steps remain pending.. The same structural dependence on Middle Eastern Crude is present, as in Australia.
Since the 2022 closure of the Marsden Point refinery, New Zealand has relied entirely on imported refined fuels—mostly from Singapore, South Korea, and Australia. This shift has left the country without domestic refining backup in the event of a global disruption. In a detailed critique, Matt Boyd of Adapt Research warns:
“This ‘point of breakdown’ … is not at all apparent from the 90-day calculations in the NZ Fuel Security Study.”
👉 Read the critique
Boyd estimates New Zealand could run essential services for ~160 days in a major disruption—but only with severe rationing, and food production and distribution would still face serious risk. Reopening Marsden Point, he argues, would cost $4.9–7.3 billion and take six years or more, making it a poor emergency response option.
Instead, he advocates for:
Local biofuel expansion
Strategic diesel storage
Supply chain resilience planning
5. Further Insights
To deepen your understanding, here are four essential reads:
CrudeOilPeak.info: Explores diesel import dependency and refinery closures in-depth.
🔗 https://crudeoilpeak.info/australian-diesel-import-dependency-on-middle-east-oil-update-april-2025BiophysEco: Provides a systems overview of accelerating global energy shocks.
🔗 https://biophyseco.org/2021/12/17/the-age-of-energy-disruptions/comment-page-1/OurFiniteWorld.com: Analyzes recent data showing diesel supply and overall energy stress.
🔗 https://ourfiniteworld.com/2025/07/14/worrying-indications-in-recently-updated-world-energy-data/Submission to Murihiku Southland Draft Energy Strategy: My local perspective and policy insights regarding energy strategy.
🔗 https://bit.ly/NS_MESS
📌 In Summary
Global diesel remains tight; supplies continue to fall short of rising demand.
Australia is increasingly dependent on Middle Eastern crude via Asia, with domestic refining in decline.
New Zealand has low diesel reserves and awaits critical policy action. Post Marsden Point, this is an existential risk to NZ Inc…
Energy disruptions are no longer short-lived spikes—they’re structural shifts with growing geopolitical turmoil as energy constraints start to undermine industrial society’s long term viability.
Here’s this week’s update:
🌍 Global Diesel Inventory
OECD distillate inventories remain ~22% below the five-year average.
🇦🇺 Australia
CrudeOilPeak confirms ~30 days of diesel supply. April 2025 update: Australia’s diesel imports remain heavily reliant on Middle Eastern crude.
🇳🇿 New Zealand
No changes to national reserve policy this week. A delayed biofuel mandate review meeting is now scheduled for early August.
🏭 Refining Capacity
Singapore: ExxonMobil’s Jurong Island refinery cut output by 3% for maintenance.
South Korea: S-Oil increased diesel exports to Japan. No immediate change for NZ shipments.
🌍 Middle East Geopolitical Roundup
Red Sea shipping lanes rerouted due to Houthi threats — adds 10–14 days to delivery timelines.
Saudi Arabia reaffirmed diesel export contracts to Asia-Pacific clients.
📉 Blog Commentary & Analysis
Art Berman: Diesel refining margins (crack spreads) are compressing under market pressure.
Surplus Energy Economics: Diesel’s net energy return is dropping under 5:1 in major export regions.
Consciousness of Sheep: Delayed policy actions are increasing vulnerability in NZ.
Thanks for this Nathan. I was searching online yesterday for this information. I needed it for a submission on a PMI consultation on new regulation for our local organic coop. The Lyttelton Harbour Coop sell a wide variety of organic produce but runs on a small margin. PMI are asking organic retailers to become registered to sell loose certified organic produce even though they have all the certification on line. They are asking for a fee of several hundred dollars to recover the cost. Like all our primary industries the regulation and infrastructure is geared toward export. But our production and export of primary produce is heavily reliant on diesel both within New Zealand and via global shipping. I am asking PMI if they have plans to protect our food security and resilience by ensuring we have strong local food systems and strategies in place. Supermarket supply chains are weak and shelves would be empty in a few days if the global or even internal diesel based transport system collapsed. I notice a reference to biofuel as a replacement. In PNG forest are being clear felled to grow crops for biofuel. Are you able to write about the relationship of land area to amount of biofuel produced. Also in some countries it may be land used for growing food.
This a great news aggregation you've made Nathan.
Should be a very useful blog to keep an eye on.