From Toilet Paper to Diesel: Are We Creating the Shortage?

The Detail

Do you remember in 2020 we had the toilet paper crisis, when people couldn’t access toilet paper because there were fears it would run out? We may be looking at a similar situation with fuel in 2026, as people start stockpiling fuel.  Episode 3 has examined real-time diesel imports, and we are not too concerned about supply (for now).

One of the challenges when analysing fuel supply in Australia is that official government statistics are often released with a lag. Import data compiled from customs reporting can take several months to become fully available, but vessel data provides invaluable insight. The shipping data is invaluable, as it provides a real-time feed on how much fuel is entering the country, without waiting for official statistics.

One of the most widely used tools for tracking global energy flows is the Vessel Explorer system within LSEG Workspace. The platform tracks tanker movements worldwide and records cargoes as ships load and discharge at ports. By filtering cargo movements by product type and destination, it is possible to estimate the volume of diesel arriving in Australia in near real time. The dataset we used for this particular analysis is diesel and gasoil.

Using this approach, we can monitor refined fuel imports as tankers berth at Australian terminals. While shipping data does not perfectly match official trade statistics, it captures around 90% of imports. In Australia, the shipping data closely mirrors the longer-term trend in government import statistics, making it a reliable indicator for this type of analysis and historically holding up to scrutiny.

The first takeaway, and an important one, is where we get our diesel from. The majority of our diesel comes from Asia, not the Middle East. These nations refine and sell to Australia, and there could be flow issues down the line as these refineries struggle to access crude, since they do purchase volumes from the Middle East and other origins.

Both datasets point to a clear structural increase in diesel imports over the past decade. Government statistics show that Australia’s diesel imports have climbed steadily since the mid-2010s, reflecting the country’s growing reliance on imported refined fuel as we have reduced our refineries to only two. Shipping data drawn from the Vessel Explorer system tells a very similar story. Tanker arrivals carrying diesel and related middle-distillate fuels have increased markedly over the same period, with annual inflows now substantially higher than they were earlier in the decade. Taken together, the two datasets reinforce the same underlying trend: Australia is importing far more diesel today than it was ten years ago.

The value of shipping data becomes particularly clear when examining the most recent months. Because tanker movements are recorded as they occur, we can assess whether fuel shipments continue to arrive as expected, even when markets are volatile.

At the start of this year, the shipping data show that diesel imports into Australia remain strong. By the end of March, cumulative diesel arrivals are expected to reach approximately 5776 kt. That is slightly below the unusually strong start seen in 2025, when imports reached around 5986 kt over the same period, but still well above most previous years.

In fact, the first three months of this year are on track to be the second highest first quarter diesel import volume on record in the shipping dataset. Only the opening quarter of 2025 recorded a higher cumulative total. By comparison, diesel imports over the first quarter reached around 5643 kt in 2024, 4531 kt in 2023, and 4426 kt in 2022.

This pattern suggests that the physical flow of diesel into Australia has remained robust despite the recent geopolitical tensions. Tankers carrying refined fuel continue to arrive at Australian import terminals at volumes broadly consistent with, or even slightly above, those seen in recent years.

That distinction is important when interpreting reports of fuel shortages. Some regional areas have experienced temporary supply issues as motorists and businesses top up tanks or store additional fuel. However, those localised disruptions do not necessarily reflect a national fuel shortage.

Fuel distribution systems typically run with limited storage capacity at individual service stations and regional depots. When demand spikes suddenly, those sites can run dry before the next delivery arrives. In those situations, the issue is usually one of short-term distribution pressure rather than a collapse in the overall supply of fuel entering the country.

Fuel supply chains are designed around relatively predictable demand. Diesel typically moves from large coastal import terminals to regional distribution depots, and then onto service stations via tanker trucks. When demand suddenly surges because people start filling extra containers or topping up tanks earlier than usual, the logistics system can struggle to keep pace even if the overall national supply stays unchanged.

The shipping data helps illustrate that point. Even as global oil markets react to developments in the Middle East, the volume of diesel arriving in Australia remains broadly within the normal range. The first quarter totals show that the country is still receiving large volumes of fuel imports, comparable to the strong inflows recorded in recent years.

For industries that rely heavily on diesel, the more immediate impact of the geopolitical tensions is likely to be price rather than availability. Diesel sits at the centre of the Australian economy, powering road freight, agricultural machinery, mining equipment and much of the nation’s heavy industry. When global oil markets become volatile, those price movements quickly ripple through the domestic economy.

For now, however, the shipping data suggests that Imports during the early part of the year remain historically strong, and the physical flow of diesel into the country has not shown signs of a significant disruption. According to the data, it is an issue within the country.

It may be a behavioural issue rather than a strictly supply issue. Behavioural economics shows that when people believe a shortage is coming, they change their behaviour in ways that can actually create the shortage they fear. Much like the toilet paper rush in 2020, the problem is not always the supply itself, but how quickly people change their behaviour when they think supply might disappear.

As people have stockpiled as many jerry cans as possible, this has led to localised supply shortages, as the supply chain cannot accommodate the sharp spike in demand, and fuel carters struggle to refill servos and regional distribution centres.

It is important to note that the situation in the Middle East and energy pricing is extremely volatile, and things may change. At the moment, we are dealing with a price issue rather than a supply issue (at least until the end of March).