This story was originally published on The Conversation.
Australia relies on diesel to move freight, run mines and harvest crops. We're now the world's top importer of seaborne diesel, importing around 28 billion litres of the fuel last year.
Diesel is the fuel most exposed to the ongoing US–Iran war as it's the biggest export product for Persian Gulf refineries. Last year, Russia was the world's biggest diesel exporter. But Ukrainian drones have now damaged many Russian refineries, making supplies scarcer. This year's turmoil has shown the risks and costs of this dependency.
In Australia, diesel prices have gone as high as A$3.20 a litre this year. Prices remain very high at around $2.79 a litre – almost a dollar more than this time last year .
Between March and August, Australia paid an extra A$9 billion to import diesel, according to the Climate Council – more than twice as much as any other country, or about $324 for every Australian.
Wars in the Middle East and Eastern Europe have done more than drive prices higher. They have redrawn the global map of buyers and sellers.
My analysis of over 21,000 diesel shipments since January 2025 exposes the shift. Exports from the Gulf have largely vanished and Russian exports have collapsed. Refineries in the United States and Asia are filling the gap.
Two big suppliers knocked out
On February 28, Iran closed the Strait of Hormuz. This blocked most crude and diesel shipments through the Gulf.
Saudi Arabia was able to keep exporting diesel from its refineries on the Red Sea. But this lifeline is fragile, as recent drone strikes on its East-West pipeline proved.
Russia was the world's largest diesel exporter in 2025, shipping about 734,000 barrels a day. But diesel exports began falling sharply in July as Ukrainian drone strikes took refineries offline. Moscow was forced to ban most diesel exports to preserve local stocks.
By October, Russia supplied just 2% of the diesel arriving at ports worldwide – a sharp fall from last year's figure of 12%.
America stepped in, Asia stepped up
The gap in supply has largely been filled by the United States. My analysis shows the US exported about 50% more diesel between April and October than its 2025 average. As of October, the US is the world's top diesel exporter.
Before the US–Iran war, Asian refineries, including India's, shipped about 28% of seaborne diesel. In October, that figure had risen to almost 40%.
These refineries are also finding new customers.
In October, Asian refiners supplied about 38% of sub-Saharan Africa's diesel imports, up from 22% before the war. Over the same period, the Gulf's share of that market fell from 44% to 24%.
Europe has changed too. India and Saudi Arabia are now the largest suppliers of diesel to Europe and the Mediterranean after the United States.
Closer to home, China supplied almost half of Singapore's diesel imports in October, up from about 12% before the war.
Asian refineries have had to change suppliers of crude oil to keep running. Before the war, 57% of Asia's seaborne crude came from the Middle East. But that share has fallen to about 40%, while Russian, American and Latin American oil has filled the gap.
What do these shifts mean for Australia?
In 2025, Australia bought almost 8% of all diesel traded by sea. Arrivals have remained steady this year despite rapid shifts in suppliers. Between March and October, around 488,000 barrels per day have arrived (about 78 million litres a day).
Global disruptions this year have led to a narrower supply chain.
In 2025, about 46,000 barrels of Indian diesel arrived per day. But none has arrived since July this year, despite official efforts to shore up fuel security .
Australia is buying much more diesel from South Korea. In 2025, South Korea supplied 29% of diesel imports. By October 2026, that figure was almost half. Australia now buys over a third of all South Korean diesel exports.
This doesn't reduce Australia's vulnerability. South Korean refineries get more than half their crude oil from the Middle East, much of it loaded at ports outside the Strait of Hormuz. About 20% of South Korean crude is now imported from the US.
If Middle Eastern supplies tighten or Korean refiners find better prices elsewhere, Australia will feel it.
Questions remain about how reliable the US is as a diesel supplier, given President Donald Trump floated a possible diesel export ban in September to rein in soaring domestic prices, before ruling it out in October. Because the US is the world's largest exporter, any pullback would tighten the market Australia buys from.
What about the Russia–US deal?
On October 9, Trump unexpectedly announced a deal with Russia's president, Vladimir Putin.
In return for the lifting of US sanctions on Russian diesel, Russia would ship a total of 1.8 million tonnes (13 million barrels) of diesel to the US. The first cargo left on October 22.
This figure is less than three weeks of Russia's pre-war exports. It's unclear whether Russia can spare the diesel. Ukraine briefly paused its refinery strikes under US pressure, but resumed within days, hitting a major Russian refinery at Yaroslavl this week.
None of this diesel will come here: Australia has banned Russian oil imports since 2022.
But at present, Australia competes with European and Latin American buyers for diesel from Asian refineries. If more Russian diesel crosses the Atlantic, those buyers would compete less intensely for Asian cargoes, which could ease supply and prices here.
What's next?
The past eight months show how fast supply chains can reroute. It took just weeks for the Gulf to lose its markets, while Asian refineries found new customers in Africa and the Mediterranean almost overnight.
Shipping through the Strait of Hormuz has picked up, but there were 29 attacks on merchant ships in the first three weeks of October – more than in any full month since March.
Australia can't assume diesel suppliers will stay loyal – or reliable. It's sensible to broaden suppliers and, as I've argued , rapidly boost diesel storage to buy time.
Policymakers and business leaders must rapidly reduce our reliance on diesel. Electric buses and delivery trucks are arriving, while some major miners are electrifying trains and haul trucks. Where batteries can't yet do the job, Australian gas could. Reducing diesel demand is our best long-term protection.
