Opinion article in the Australian Financial Review by Samantha McCulloch, Chief Executive of Australian Energy Producers, 18 March 2026.
The Iran conflict has upended global energy markets. International oil and gas prices have surged after key Middle East production and distribution routes ground to a halt.
It has also brought the issue of fuel security into sharp focus. For Australia, it is a sobering reminder of the economic and strategic advantage that comes from having secure domestic energy supply.
It comes at a critical moment for Australia’s energy policy, as the federal government embarks on major reforms to the east coast gas market arising from its Gas Market Review, including the introduction of a domestic gas reservation scheme.
The contrast between what has happened to gas and petrol prices in Australia since the conflict began underscores why it is so important we get these reforms right.
While Australian petrol prices have surged by about 20 per cent and are expected to rise further, domestic gas prices are the lowest they have been in years. In fact, gas prices in eastern Australia continued to ease while global prices doubled.
Natural gas is essential to Australia’s energy security, providing about one-fifth of our energy needs. It is the main source of energy used in manufacturing, generates reliable electricity, and is used in half of all Australian homes for cooking and heating.
Australia holds an enviable advantage: abundant gas resources at a time of record global demand, rising geopolitical uncertainty, and increasing pressure to balance the transition to cleaner energy with reliability and affordability.
Australia’s gas self-sufficiency means we are relatively insulated from global shocks, as prices are largely determined by domestic supply and demand trends.
The situation is very different for petrol and diesel. Australia imports almost all its liquid fuels. When global oil prices rise, the impact is soon felt at the bowser. This reinforces concerns that liquefied natural gas (LNG) import terminals would lead to higher prices and increased exposure to global volatility.
It also exposes the short-sightedness of opportunistic calls to levy a massive new tax on Australia’s third-largest export. The gas industry is already Australia’s second-largest taxpaying sector. As Resources Minister Madeleine King noted last week, the Greens’ plan to tax LNG exports would freeze investment in new gas supply, putting Australia’s domestic energy security at risk. It is a recipe for gas shortfalls, higher energy prices, and the closure of Australian industries that depend on reliable and affordable gas.
Instead, the focus should be on consolidating Australia’s leading role in regional and global energy security and supporting investment in the new gas supply needed at home and abroad.
The Gas Market Review presents an opportunity to reset national gas policy and restore certainty and investment confidence for Australian gas producers and users, and for trade partners that depend on our gas for their energy security.
Key to the success of these reforms is getting the design of a reservation scheme right. Australian gas producers support the introduction of a well-designed, prospective reservation framework linked to new supply.
To work effectively, it must be flexible enough to respond to seasonal demand, replace the complex web of overlapping regulations currently in place, and maintain Australia’s role as a reliable trading partner.
If we get it right, the reforms will ensure Australian households and businesses continue to benefit from reliable and affordable gas for many more decades.
If we don’t, a poorly designed scheme risks discouraging investment, reducing competition and crowding out new sources of domestic supply – ultimately exacerbating supply and cost pressures.
There is optimism on all sides that the Gas Market Review provides a foundation on which to build a functional, resilient and competitive gas market.
Recent international events serve as a powerful reminder of what is at stake.
