Ryan Bridge: On oil shock, people want more self-reliance

The war in Iran is not a shocking event in the sense that we knew it was coming.

Trump has been not so much hinting, but sounding a fog horn for months. As we’ve been covering on this show, he’s been amassing military assets in the region since the end of January.

So not surprising. What has surprised is Iran hitting their neighbours, the Gulf states, so hard, including oil fields and refineries. This has surprised markets. Hence what we’re seeing in Asia and at home.

Same goes for the price of oil. Yesterday when we talked about that Goldman Sacks estimate of $100 a barrel by the end of the week. We got there by the end of Monday.

Remember they also warned of $150 a barrel by the end of the month? Let’s hope we’re not there by Friday.

Oil and fertilizer run our agriculture sector. I listened to a grain farmer in Christchurch yesterday say daily harvesting costs would increase by $2000-$3000. Already.

We are not immune to the price spikes, but we’re also not very well insulated from them either.

We’re reliant on energy imports to keep us afloat now more than ever. Marsden Point used to refine 70% of our petrol and 90% of our diesel. Extracting oil and gas became a cardinal sin under Labour.

You don’t know what you’ve got ‘till it’s gone.

The international shocks, which as we all know, aren’t now so shocking, are also driving a surge in support for economic nationalism and self-reliance. Think New Zealand First.

To this Government’s credit, it has extended our emergency oil back-up supplies and done deals with the Singapores of the world so we don’t run out. As a back stop, we’re about to do LNG. But again, that’s imported and subject to shocks.

The more global events we have, the more we yearn for self-reliance and greater energy independence.

Our world-beating exports keep us afloat, but what use are they without a reliable supply of reasonably priced inputs that help produce them?

Ryan Bridge is a New Zealand broadcaster who has worked on many current affairs television and radio shows. He currently hosts Newstalk ZB's Early Edition - where this article was sourced.