Nicola Willis: Finance Minister on the ongoing global oil crisis, action in the Strait of Hormuz

Finance Minister Nicola Willis has emphasised there’s a range of scenarios for inflation amidst the global oil crisis – not just the worst-case scenario of 3.7% outlined yesterday. 

“We don't know what's going to happen with factors that are outside of our control,” she told Mike Hosking. 

“We don't know how long the Strait of Hormuz will stay closed. We don't know whether Asian refineries will be able to access alternative supplies of oil in sufficient quantities, and we don't know whether importers will be able to access alternative supplies of refined products. So we're preparing for all of those scenarios.” 

The Government remained "hopeful" there was enough cover, refineries could keep producing enough fuel and importers could bring in the quantities New Zealand needed. 

Treasury would be the first to acknowledge their forecasts were “guessing games”, but "we have to plan for what could be around the corner so that if bad things happen, we're ready". 

Hosking pointed out other countries were taking action to relieve mounting costs, including heating oil relief in the UK overnight. 

But Willis said the UK and Europe’s energy and electricity prices were much more affected by events in the Middle East than New Zealand, which relies largely on hydro and renewables. 

Our Government is closely monitoring the international response to the ongoing closure of the Strait of Hormuz. 

Donald Trump is calling on several allies to send warships and other support to secure the strait. 

Japan and Australia say they currently have no plans to send naval ships and UK Prime Minister Keir Starmer say neither will Britain be drawn into a wider war. 

But Willis told Mike Hosking there will be much to play out in the days ahead. 

She says they do want to see the Strait of Hormuz reopened, and it will be up to all countries to decide whether and what role they plan. 

"We haven’t been asked to participate in any particular efforts in the Strait.” 

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