Oil price shock for New Zealand far from over - Westpac economist
New Zealand faces continued economic pressure as oil prices remain volatile due to ongoing geopolitical tensions in the Middle East, specifically involving Iran and the Red Sea. Economists warn that fuel prices at the pump are likely to remain high and could increase further if global crude prices persist at current levels.
Why it matters
The report illustrates how regional conflicts in the Middle East have direct, tangible impacts on the cost of living and inflation in distant economies like New Zealand.
The oil price shock that hit New Zealand earlier this year in the wake of the Iran war is far from over, and Kiwis may soon have to again fork out for higher petrol prices.
That's the view of Westpac chief economist Kelly Eckhold, who has been a close watcher of the fuel crisis as it has developed this year.
On Thursday, the price of Brent crude oil hit a six-week high of US$96 (NZ$165) a barrel, as Iran and the US continued to exchange fire over control of the key oil route through the Strait of Hormuz.
Adding to the price pressure are new concerns that the back-up route through the Red Sea is also being affected by threats from Yemen's Iran-backed Houthi rebels.
Kelly Eckhold said the message for Kiwis is that the crisis is far from done.
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