Crude Oil in 2025: Trends, Policy, and Impact on Australians

Crude oil remains the world’s most traded commodity—and in 2025, its influence on Australia’s economy and household budgets is as strong as ever. From petrol prices to energy bills and investment portfolios, the ripple effects of global oil swings are being felt across the country. But what’s actually driving crude oil’s latest price moves, and how are policy changes at home and abroad shaping the outlook for Australians?

1. 2025 Oil Price Movements: A Year of Surprises

The start of 2025 has seen crude oil prices fluctuate dramatically. After a period of relative stability in late 2024, supply disruptions in the Middle East and renewed demand from China and India have pushed Brent crude back above $90 USD per barrel—a level not seen since the 2022 energy crunch. Australian motorists have noticed, with average unleaded prices in Sydney and Melbourne nudging $2.20 per litre by March.

• Supply disruptions: Ongoing geopolitical tensions in the Red Sea and OPEC+ production cuts have tightened global supply.

• Renewed demand: Post-pandemic economic recovery in Asia, especially China’s reopening of heavy industry, has ramped up global oil consumption.

• Australian dollar impact: The AUD’s softness against the USD in early 2025 has further amplified price rises at the pump and for local importers.

For businesses and families, these price swings mean higher costs for transport, logistics, and even groceries, as fuel surcharges flow through supply chains.

2. The Policy Picture: New Carbon and Fuel Regulations

2025 has brought significant policy shifts affecting oil markets—both globally and in Australia. The Albanese government’s Fuel Efficiency Standard, effective from July 2025, sets stricter emissions caps on new vehicles. While aimed at accelerating the shift to electric cars, the move is also expected to gradually reduce demand for petrol and diesel imports over the next decade.

• Fuel Efficiency Standard: New cars sold from mid-2025 must meet lower emissions thresholds, with hefty penalties for carmakers who miss targets.

• Global carbon pricing: The EU’s expansion of its carbon border adjustment mechanism (CBAM) in 2025 has made oil-intensive exports pricier, affecting Australian agriculture and mining sectors reliant on diesel.

• Refinery closures: Australia’s domestic refining capacity is at its lowest in decades, making the nation more exposed to global crude price shocks and shipping disruptions.

These policy moves are designed to hasten the energy transition, but they also mean Australian consumers and businesses will need to adapt to a more volatile and potentially expensive fuel landscape in the medium term.

3. How Oil Volatility Hits Everyday Australians—and What You Can Do

Every swing in the global oil market eventually makes its way to Australian wallets. The impact isn’t just at the servo. Rising oil prices often mean:

• Higher airfares and freight costs as airlines and logistics firms pass on surcharges

• More expensive groceries due to increased transport costs for food and goods

• Volatility in investment portfolios, especially for super funds and ETFs with exposure to energy stocks

With price uncertainty expected to persist in 2025, what can savvy Aussies do?

• Consider fuel hedging if you run a business with large transport needs—some companies are locking in prices via forward contracts.

• Rethink car choices—the new Fuel Efficiency Standard means more affordable hybrids and EVs are coming to market, with state subsidies still available in NSW, Victoria, and Queensland.

• Diversify investments—if your super or portfolio is heavy on oil and gas, consider reviewing your asset mix in light of ongoing volatility and the global shift to renewables.

Real-world example: Sydney-based logistics company FleetPro locked in its diesel prices for the first half of 2025, saving an estimated $50,000 compared to market rates after the February price surge. Meanwhile, families in regional Victoria are increasingly turning to carpooling and public transport to offset the rising cost of living driven by fuel inflation.

The Bottom Line: Oil’s Shifting Role in Australia’s Financial Future

As crude oil markets remain in flux, Australians are navigating higher costs and new policy settings designed to reshape how we use—and pay for—energy. While 2025’s price spikes are a reminder of our continued dependence on global oil, they’re also fuelling innovation, from smarter fuel management to faster adoption of low-emission vehicles. Staying informed and agile is key to weathering the oil rollercoaster—now and in the years ahead.