Global oil prices have surged past 100 dollars a barrel as conflict in the Middle East intensifies, with threats to close the Strait of Hormuz disrupting a route that carries about one fifth of the world’s oil. Reports of attacks on tankers and rising geopolitical tensions have fuelled fears of supply shortages, pushing petrol prices in Australia above 2 dollars a litre in many areas and triggering panic buying.

In response, the federal government has allowed fuel companies to release nearly 800 million litres of petrol and diesel from domestic reserves to ease pressure on supply. Officials have cautioned that it will take time for the additional fuel to reach service stations, as demand for petrol and diesel has reportedly doubled in some regions.

The government has also temporarily relaxed fuel quality standards so higher sulfur petrol, usually exported, can be sold domestically. While some politicians have proposed rationing fuel in cities to protect regional communities, the government has rejected that approach for now.