Eleven finance ministers, including New Zealand's, have warned that the economic fallout from the war between the US, Israel and Iran will persist even if a fragile ongoing ceasefire manages to hold.
The joint statement, which included Finance Minister Nicola Willis, called for a ceasefire to be implemented in full and warned that renewed hostilities would pose serious risks to global energy security, supply chains and financial stability.
Finance ministers from the UK, Australia, Japan, Sweden, the Netherlands, Finland, Spain, Norway, Ireland, Poland and New Zealand signed the statement.
In the joint letter, Willis and other ministers said the conflict had caused "unacceptable loss of life and significant disruption to the global economy and financial markets", and stressed that the ceasefire would be crucial to protecting civilians and regional security.
They called for a swift and lasting negotiated resolution and the return of free and safe transit through the Strait of Hormuz, the narrow waterway between Iran and the Arabian Peninsula through which roughly a fifth of the world's oil passes.
"Even with a durable resolution of the conflict, impacts on growth, inflation and markets will persist," the statement said.
Willis was currently in Washington DC for the International Monetary Fund and World Bank spring meetings, where she has been holding talks with counterparts and pressing US officials on the economic fallout from the conflict
National's Chris Bishop said the Government was "planning for the worst", as Labour's Keiran McAnulty called for a more upfront approach to the fuel plans. (Source: Breakfast)
She was expected to meet today with US officials to raise concerns about the conflict's impact on New Zealand's fuel supply and economy, The Post reports.
Willis told the newspaper yesterday that it would be a chance to ask American officials on their view of when global conditions might return to "normal".
New Zealand's fuel stocks fell for a second consecutive update on Wednesday, with one "small shipment" from Singapore delayed by between two and four days, an MBIE spokesperson confirmed to 1News today.
Officials warned such delays were likely to become more common as more vessels used Singapore as their primary loading hub.
"This is because, as some countries have closed their export facilities, more vessels are using Singapore as their primary loading hub – leading to congestion and delays."
Figures published yesterday showed total on-water and in-country stocks at 56 days of petrol, 45 days of diesel and 47 days of jet fuel - all down from the previous snapshot.
Fuel situation 'can go pear-shaped extremely quickly'
In-country diesel sat at around 21 days as of 11.59pm Sunday.
Energy analyst David Keat told Breakfast today that current overall fuel levels represented "a normal fluctuation in fuel supply chains" and that phase one of the fuel plan was appropriate for now.
"What we're seeing is a normal fluctuation in fuel supply chains. If you can imagine, it's a sawtooth pattern - as we consume fuel, the stocks dribble down and down and down, and then a tanker gets loaded in Singapore or somewhere, and the stocks shoot up."
But Keat, who has also worked in the Persian Gulf, cautioned that the situation "can go pear-shaped extremely quickly" with little warning – pointing to scenarios including a refinery crude shortfall, a refinery breakdown, or further escalation in the Middle East.
He said diesel was "by far the hardest fuel of the three" to manage in a shortage, partly because it was used in non-discretionary heavy industry, and partly because crude from the Gulf resulted in more diesel than Venezuela or the Canadian tar sands alternatives.
The Government’s been advised it would need to hike the petrol tax by 21 cents a litre next year to level the playing field. (Source: 1News)
"You always plan for the worst and hope for the best. Most likely it will be fine but if it's not, it's going to get more than a bit of a worry quite quickly," he said.
"The problem with that is it can go pear-shaped extremely quickly... and New Zealand wouldn't get very much warning of that."
Keat said the situation would be "quite serious" for diesel if that were to happen.
He also estimated the disruption could drag on, saying even if the conflict ended today, it could take years for oil infrastructure in the region to be fully rebuilt.
Yesterday, Prime Minister Christopher Luxon said there was "no risk of disruption to our future fuel supply", pointing to confirmed orders in May and planned orders through June. The country would remain at phase one of its fuel plan, the PM said.
"I want to reassure New Zealanders. We have a fuel supply. We have no risk of disruption to our future fuel supply. We've got confirmed orders out to the end of May," he said.
"We've got planned orders well through June. We're in a good position."
He also downplayed the significance of delays affecting a New Zealand-bound ship in Asia.
An MBIE spokesperson told 1News "the departure of one small shipment from Singapore has been delayed by between two and four days". The ministry stated it wasn't able to disclose further details due to confidentiality commitments with fuel companies.
When asked by reporters yesterday, Luxon said of the reported delay, "it's a technical thing and a very minor thing, and not a significant thing at all."
Ministers commit to fiscally 'responsible' responses
In their letter, the ministers committed to managing the economic response "in a coordinated, responsible and responsive way", and pledged that domestic responses would be fiscally responsible and targeted at those most in need.
They called on all countries to avoid protectionist actions, including export controls, stockpiling and other trade barriers in hydrocarbon and other supply chains affected by the crisis.
The statement urged the International Monetary Fund and World Bank to provide coordinated emergency support for vulnerable countries, particularly small and remote island states reliant on imported energy.
The calls for diplomacy come as the US enforces a blockade on Iranian ports, with reports that no vessels made it through the blockade's first 48 hours. Iran's joint military command has threatened to halt trade in the Gulf region if the blockade isn't lifted.
According to reporting by the Associated Press, the ceasefire announced on April 7 is slated to expire next Tuesday, and mediators' efforts to extend it are continuing — though a senior US official said Washington had not formally agreed to an extension.
The ministers also reaffirmed support for Ukraine, saying the war, now in its fifth year, continues to hurt the global economy, adding Russia "must not benefit from this conflict".
Russia has benefited from surging oil prices globally and constrained supply.
– with additional reporting by Benedict Collins
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