Middle East conflict cuts Australian farm profits by 40 per cent
Middle East conflict has raised crude oil costs, cutting Australian farm profits by about 40 per cent through higher diesel prices.
The Middle East conflict has disrupted global oil supplies, pushing crude oil prices from around $70 to over $105 per barrel. Australia imports around 80 to 90 per cent of its diesel, making farmers especially vulnerable.
Grain farmer Adrian Roles near Wagga Wagga said the spike now costs him about 40 per cent of his profitability. The conflict damaged pipelines that bypass the Strait of Hormuz, which normally carries a fifth of the world's oil.
Oil refiners are widening profit margins, with the "crack spread" (profit per barrel) jumping from around $24 to $69. Transport companies are passing fuel costs to customers, which pushes prices up across the economy.
Commonwealth Bank head of commodities Vivek Dhar expects diesel to stay well above pre-war levels.
- $70 per barrel
- Crude oil price before conflict
- Over $105 per barrel
- Crude oil price now
- 40 per cent
- Profit hit for Roles
- 80 to 90 per cent
- Australia's diesel imports
Why it mattersDiesel fuels farming, transport, and shipping; higher costs push inflation through food, goods, and services everywhere.
AustraliaAustralians will pay more for food, transport, and delivered goods as fuel imports become more expensive from global conflict disruption.
✓ Claims checked against the source and corrected before publish. checked 7 d ago
