Australia is gripping the pump as petrol prices breach $2 per liter across most of the country, with only isolated pockets of Sydney clinging to cheaper fuel.

Panic buying swept service stations Sunday night as news.com.au reported drivers queuing to fill up before the psychological barrier was crossed. The surge follows oil prices spiking above US$100 per barrel amid escalating conflict in the Middle East.

Mate, there's a whole continent down here that runs on imported fuel. And right now, we're feeling every dollar of that dependence.

The crisis has exposed Australia's minimal strategic petroleum reserves - among the lowest in the developed world relative to consumption. While most OECD nations maintain 90 days of reserves, Australia holds barely three weeks of refined fuel stocks on domestic soil.

New Zealand faces similar pressures, with drivers flocking to pumps as oil passed the century mark. The spike threatens to derail both countries' efforts to contain inflation, which had only recently begun moderating after two years of aggressive interest rate hikes.

Transport operators warn the fuel shock will cascade through supply chains within days, driving up costs for everything from groceries to building materials. The Australian Trucking Association estimates a 10% increase in diesel costs adds roughly 2% to the retail price of most goods.

Electric vehicle advocates seized on the crisis to renew calls for accelerated EV uptake, though Australia's charging infrastructure remains patchy outside major capitals. The federal government has so far resisted calls to tap emergency reserves or cut fuel excise, instead pointing to global market forces beyond Canberra's control.

For Pacific Island nations, the oil spike presents an existential threat. Small island states already spend up to , and many lack the foreign exchange reserves to absorb sustained price increases. The crisis underscores the region's vulnerability to external shocks - and the urgent need for renewable energy transitions that has been slow to support.