NEWS + VIEWS – 19/06/2026
MARKETS
Global share markets in the past week were driven primarily by easing Middle East tensions and central bank policy. Sentiment improved after a US-Iran agreement reduced fears about the closure of the Strait of Hormuz. Oil prices fell sharply as equities rallied, particularly technology stocks, with the SpaceX IPO reinforcing enthusiasm for large-scale US technology companies. At the same time, investors assessed a hawkish stance from the US Federal Reserve and other central banks.
In Australia, the ASX 200 was initially supported by optimism surrounding the Iran agreement, with major banks and miners pushing the index to multi-week highs. However, the market later softened due to weakness in metal prices and concerns about global growth. Investors also continued to monitor expectations for future Reserve Bank of Australia policy decisions.
THE RUSH TO STOCKPILE OIL
Hit by the second global energy crisis in four years, governments are developing a bunker mentality, writes Carol Ryan in the Wall Street Journal. If they follow through on plans to stockpile more oil, energy prices could stay higher for longer no matter what happens next in the Middle East.
Even with an agreement between the US and Iran aimed at ending the war, the oil price isn’t likely to fall back to levels seen before it began. There is a backlog of tankers loaded with around 100 million barrels of oil that needs to clear the Strait of Hormuz.
Close to 500 million barrels of crude oil and refined product are needed to replenish the inventories used up outside the Persian Gulf so far, a number that rises by 5.8 million barrels for every day the strait remains closed, according to S&P Global Energy. Even if a 1-million-barrel-a-day surplus were to magically appear, it would take more than a year to get global oil inventories back to pre-war levels.
However, governments scarred by recent experience will want more than a return to normal. Many analysts think stockpiles will eventually settle higher than they were before the war, as countries will want a larger cushion against future energy shocks.
Pakistan, which has no strategic oil reserve, now plans to set one up. It wants international oil producers to build commercial inventories in a new ‘Energy City’, likely to be located at Port Qasim, near Karachi. The Philippines is also establishing its first strategic petroleum reserve program. The Indonesian government said it would build new storage facilities to boost stockpiles, and India is expanding its reserves. Japan has pledged $10 billion in financial aid to help countries that want to build storage facilities and oil stockpiles in Asia. All of this should keep the oil market tight.
Sultan Ahmed Al Jaber, chief executive of the Abu Dhabi National Oil Co., thinks it will take four months for traffic to get back to 80% of pre-war levels. He says getting fully back won’t happen before the first or second quarter of 2027. Saudi Arabia’s state oil company, Saudi Aramco, gave a similar time frame. Saudi Arabia and the UAE, which both have spare capacity, should be able to increase production quickly. After leaving OPEC last month, the UAE is now free to pump as much oil as it wants. However, producers like Iraq and Kuwait will need more time.
Previous shocks caused big shifts in energy strategies. The twin oil crises of the 1970s forced the US to use energy more efficiently and to switch to alternative fuels where it could. Similar changes may be afoot today in other areas. In addition to stockpiling, countries are looking at ways to produce more energy at home. European Union ministers are debating whether to boost oil and gas production in the region, which would have been unthinkable a few years ago.
The availability of cheap Chinese electric vehicles and solar panels also gives more options to countries trying to wean themselves off fossil-fuel imports. In March, 50 countries set all-time records for imports of Chinese solar components. But a true energy transition away from oil will take time. For now, the imperative to boost inventories will be the prevailing, and more powerful, impulse.
The implications for Australian LNG exporters may be more significant than for oil producers. Many Asian countries don’t just need crude oil reserves; they also need secure gas supplies for power generation. Countries such as Japan, South Korea, India, the Philippines, and emerging Southeast Asian economies are increasingly focused on energy security. Both Woodside Energy (WDS) and Santos (STO) are leveraged not only to commodity prices but also to the value of being reliable LNG suppliers located close to Asian markets.
Woodside recently increased its stake in the Browse project off the coast of Western Australia, strengthening its long-term LNG resource base. Scarborough is nearing completion and targeting first LNG cargoes in late 2026, giving WDS a major production growth project just as energy-security concerns remain elevated.
Santos’ Barossa project is ramping up production and management has emphasized the company’s role in Australian domestic energy security. Meanwhile, the $3 billion Dorado oil and gas project in the Bedout Basin is back on the front-burner amid the global energy security crisis, a little over a year after it was shelved.
MINIMUM PENSION REMINDER
For those whose super is in pension phase, please ensure that you have withdrawn the minimum pension amount before 30 June 2026. If you are unsure of what your minimum pension is, please contact your accountant.
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