We are seeing the diesel (gasoil) price rise relative to petrol (gasoline). The refinery crack spreads for diesel and jet fuel are also increasing. These must ultimately flow through to Australian prices.
With the war in Iran re-intensifying, I have returned to preparing a weekly energy update.
Brent is heading back towards $100 USD per barrel in the front month futures market.
Each month I have taken the opportunity to reflect on the war in Iran and consider what might happen next. This is the fifth piece in that series, and the first written after the war it has been tracking formally ended.
It ended on 17 June, at Versailles, on the sidelines of the G7. Trump and Pezeshkian signed a memorandum of understanding declaring the war over, reopening the Strait of Hormuz, lifting the US naval blockade, issuing waivers for Iranian crude, releasing frozen assets, committing to a reconstruction package, and parking the nuclear question in a sixty-day negotiating window. "It's signed," Trump told reporters leaving the palace. "Signed in Versailles. Just signed it."
Prices at the pump will rise this week as the fuel excise is partially restored. This will see a 16c/l increase at the pump.
We have heard it many times before: the United States is on the verge of a deal with Iran. Trump has announced breakthroughs that never materialised, and markets have learned to discount the rhetoric. This time appears different, and for one concrete reason. The progress is no longer just a presidential claim. On June 12, Pakistan, the mediator that brokered the ceasefire, publicly confirmed that both sides had agreed on the final text of the memorandum of understanding, the so-called Islamabad Declaration. A signing venue in Geneva is being arranged. Agreed text confirmed by a third-party government is a different animal from another "soon" on Truth Social, even if Tehran is still careful to stress that nothing is final until it is signed. My take: more believable this time, but let's see if it is actually signed.
Crude prices are reading it as optimism. Both benchmarks have rolled over from their May highs, with WTI settling at \$84.88 and Brent at \$87.33 to close the week.
Of note: the Fair Work Commission has a proposal before it to extend the diesel cost pass-through for truckies.
Australia's minerals belong to the nation – the people. The Commonwealth owns Australia's offshore petroleum resources. The States own onshore minerals – coal, iron ore, gold, lithium, every extractable resource beneath Australian soil. Private companies do not discover resources and then own them. They apply for the right to extract resources that already belong to the nation, and that right should only be granted on the basis of a reasonable return to the people who own them.
This principle has been watered down. The Federal Government has allowed private companies – many of them foreign-owned multinationals – to extract finite, irreplaceable public wealth at scale while returning far less than the value of what is being alienated, and far less than Norway, the United Kingdom, and other comparable jurisdictions capture. Six of Australia's ten liquefied natural gas (LNG) export facilities pay no royalties and little or no Petroleum Resource Rent Tax (PRRT), despite generating billions in annual export revenue.
The Australian Taxation Office's (ATO) Corporate Tax Transparency data shows the oil and gas sector has been a systematic low payer of PRRT relative to its revenue scale. That pattern has prompted repeated policy intervention to secure a more timely and minimum return from the offshore LNG industry. These are not normal business profits on private assets. They are returns on resources that belong to Australians, and Australia is not receiving a fair share of them.
This is not an argument about government needing more money to spend. It is a prior question: on what terms should a government grant private companies the right to extract and sell public assets? The answer should be straightforward – only on terms that deliver a fair return to the owners. Norway has built a sovereign wealth fund worth \$1.9 trillion, roughly \$350,000 per citizen, on exactly that basis. The question for Australia is not whether to insist on fair terms. It is how to get there from where we are now, given two previous failed attempts and constitutional arrangements that complicate comprehensive reform.
On Friday, Iran's Foreign Minister announced that the Strait of Hormuz had been reopened to commercial vessels, coinciding with the Israel-Lebanon ceasefire. The announcement occurred after markets had closed for the weekend in Australia but before they had closed in Europe or the United States. While Iran states the strait is fully operational for commercial traffic, vessels must use Iranian-designated routes and obtain permission from Iranian authorities. The US naval blockade of Iranian ports remains in place. Markets reacted strongly to the news, with oil prices falling sharply and stock indices reaching record highs.
