Goldman Sachs warns oil could surge past $100 per barrel if Strait of Hormuz shipping doesn't recover, potentially reshaping Australia's car market as sustained high petrol prices could finally drive mass EV adoption in a country that's lagged behind.
The analysis, reported by Reuters, highlights how geopolitical disruption in the Middle East could have unexpected consequences for transport electrification in Australia and across the Pacific.
Mate, Australia has been slow on EVs compared to Europe or even the United States. High fuel prices might do what policy hasn't - force the transition. And this matters for Pacific Islands entirely dependent on imported fuel. A global oil shock hits the region hard.
With petrol prices already among the highest in years, a sustained spike to $100+ oil would translate to petrol costs exceeding $2.50 per liter across Australian cities. At that price point, the economics of EV ownership become compelling even without subsidies.
Australia has one of the world's lowest EV adoption rates among developed countries. Less than 10 percent of new car sales are electric, compared to over 50 percent in Norway or 25 percent in China. The reasons include limited vehicle options, inadequate charging infrastructure, and cheap petrol - until now.
Governments have tried various policies to boost EV uptake: purchase rebates, stamp duty exemptions, fleet targets. But behavioral economics suggests nothing drives vehicle choice like fuel costs. When filling a tank costs $150, people start looking at alternatives.
The regional dimension is critical. nations import all their fuel at significant cost. Many islands spend 10-15 percent of GDP on fossil fuel imports for transport and electricity generation. When global oil prices spike, it's economically devastating.
