The swelling conflict in the Middle East between Israel, the United States (US) and Iran along with its proxies is being closely watched by the world for its impacts on the world economy, most importantly the impacts it is having on the supply and shipment of oil and fuel.

Papua New Guinea (PNG) along with the other smaller pacific island States, are expected to be heavily impacted by this crisis with fears of fuel shortage and the subsequent high cost of goods along with shortages of goods, mostly the imported ones.

The Iran war is disrupting the global oil supply because the Middle East is the world’s most important oil-producing regions, and with most pacific countries depending on imported fuel, the people are feeling the pinch of it now.

PNG depends on fuel for the transportation of goods, both domestically and internationally. It relies on fuel to generate electricity to power the rural areas and to accommodate the movement of people using the various means of transportation that depends on fuel. So, one can only imagine what it would be like should the war prolongs.

The current fuel supply in PNG

Despite this happening, Puma Energy (PNG) Limited, the main supplier of fuel in the country, states that PNG is alright for now with the supply of fuel.

While Iran is attacking oil tankers on the Strait of Hormuz and hitting oil facilities in the neighboring Gulf States, causing the prize of oil to go up more than a 100 dollars per barrel, Puma Energy PNG’s General Manager, Mr. Daniel Duffau says the fuel storage and supply in PNG is still good.

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Picture: The Strait of Hormuz is currently blocked by Iran and its attack on oil tankers is causing disruptions to the flow of oil out of the region.

PNG HAUSBUNG received a short massage from the General Manager stating that there is sufficient stocks in-country to ensure security of supply and meet current customer demand.

“We continuously monitor market developments, and we are well positioned to manage short-term volatility while maintaining reliable operations,” said the General Manager.

“While there are several geopolitical, logistical and market factors at play, supply chains remain operational. In addition, many Asian economies maintain strategic petroleum reserves that provide an additional buffer, reinforcing regional energy security should disruptions occur.”

Puma Energy PNG supplies more than 650 million liters of fuel in one year to customers in the country. This includes petrol, diesel, Jet A1, LPG and other oil products. But how long would this hold out?

This is because Iran exports over 1–1.5 million barrels per day, mostly to Asia. Key oil terminals such as Kharg Island in Iran handle most of these exports. If the US strikes or attacks these facilities, it can remove large amounts of oil from the market. This could cut up to 2 million barrels per day.

Fuel price goes up

The fuel supply in PNG may be good for now, but the price of fuel is expected to further go up due to the conflict in the Middle East says the country’s consumer watchdog, the Independent Consumer and Competitions Commission (ICCC).

The ICCC stated in a statement that the prices for diesel, petrol and kerosene have increased for the month of March and is expected to get worse because of the increase in crude oil prices in February primarily driven by unplanned supply outage due to severe weather conditions and the geopolitical tension between the US and Iran, exacerbated by strong demand growth in developing economies.

“The most recent US/Israel- Iran War which erupted on 28th February 2026, will affect the domestic prices in PNG next month (April), given the one- month lag in domestic price calculations,” the ICCC said in that statement.

Waigani closely watching the situation

Nevertheless, the National Government at Waigani in Port Moresby city is closely monitoring the world situation and stands ready to step in with solutions should things get out of hand.

A confident Prime Minister James Marape on Monday 16th March 2026 came out to assure the country that his government is proactively implementing comprehensive measures to safeguard the country’s fuel security and shield citizens from the impact of rising global fuel prices.

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Picture: PM Marape assures the country that his government is aware of the fuel situation and measures are being taken to handle it.

Prime Minister Marape said the Government is working on standby fuel supply arrangements to ensure continuity of supply across the country, as global energy markets face increasing volatility.

“We are putting in place standby facilities to guarantee fuel security for our nation going forward,” Prime Minister Marape said. “In light of what is happening globally, especially in the Middle East, we are not taking any chances when it comes to ensuring that our country has sufficient fuel reserves.”

Marape confirmed that relevant authorities have been directed to explore relief measures for citizens should international fuel prices increase. The focus is to keep fuel prices stable and within manageable levels for households and businesses.

Hope for the best outcome

So, the hope now is that the US along with Israeli find a solution to this war soon and for Iran to stop bombing shipments of oil and the facilities in its neighboring Gulf States. However, even if the war does comes to an end, the damage may take some time to fix.

PNG Institute of National Affairs (INA) Executive Director Mr. Paul Barker told PNG HAUSBUNG that the damage to the oil supply and the world economy would take some time to fix up.

“It would take time to go back to normal because all the ships are in the wrong places, they are sitting out at sea, or they’ve gone back to port. So yeah, it takes a while to resolve,” stated Mr. Barker.

Meanwhile, this conflict is heading into its fourth week and the more it carries on, the gloomier the world becomes.