Fuel prices across the Pacific could rise in the coming months after Israeli and US attacks on Iran and Iran’s response raised fears of disruption to global oil supplies.

Iran borders the Strait of Hormuz, a key route that carries about 20 per cent of the world’s oil and gas. Following the attacks, shipments through the area have stopped, which raises concerns that crude oil prices could climb to about US$100 per barrel.

Saul Kanovic, an energy analyst at MST Financial in Sydney, told RNZ Pacific the threat to global energy markets is serious.

“If the situation doesn’t de-escalate and passage through the Strait of Hormuz remains disrupted, we could see a global energy crisis similar to the 1970s,” Kanovic said. “This could be even bigger.”

Pacific island nations are especially vulnerable because they rely heavily on imported fuel and face high shipping costs due to their remote locations.

Kanovic said transport costs are likely to rise as fuel prices increase, and shipping insurance premiums may also climb.

Pacific countries often purchase fuel in advance through forward contracts and ship it in bulk, delaying the immediate impact of price increases. However, higher fuel costs will eventually push up freight prices for both shipping and air transport.

Glen Craig, special envoy for international development for Vanuatu, said the impact will depend on how long the conflict continues and how quickly countries use up their fuel reserves.

“No one is panicking now, but there will likely be fuel price increases at some stage,” Craig told RNZ Pacific. “We should be okay, but it depends on how big and how long this conflict goes on.”

Craig said the effects could reach Pacific economies within about four months, raising the cost of imported goods, tourism and regional travel.

Meanwhile, Papua New Guinea could see some economic benefits as an exporter of petroleum and gas.

Foreign Minister Justin Tkatchenko said higher global energy prices could increase export earnings, although domestic consumers would still face rising fuel costs.

“It will definitely benefit PNG, but fuel prices for the domestic market will also go up,” Tkatchenko said.

According to the country’s 2025 budget, mining and petroleum taxes brought in about US$971 million in revenue, a 16.5 percent increase from the previous year.

Prime Minister James Marape has said the government may use the additional revenue to help support consumers if fuel prices rise further.