The owner of one of Australia’s two oil refiners has warned that the crisis in the Middle East is continuing to drive the cost of “black gold” higher.
As a result, Ampol’s Lytton refinery in Brisbane has experienced a huge increase in its refiner, or profit, margin in the first quarter of its financial year.
The difference between what it pays for crude oil and what it sells the refined product for has risen to $US25.45 per barrel, from $US6.07 per barrel in the same quarter in 2025.
The conflict began on February 28 when the US led an attack on Iran, resulting in the closure of the Strait of Hormuz, through which about 20 per cent of the world’s crude oil supply flows.
Ahead of the war, Brent crude was trading around $US60 a barrel. It’s now just under $US100, after jumping as high as $US120, pushing up prices at the petrol pump.
Some analysts have warned that crude could soar to $US150 a barrel if the crisis continues into the second half of this calendar year.
The Lytton refinery increased production in the first quarter by 10 per cent to 1434 million litres.
Ampol also reported fuel sales increased 4.7 per cent, supported by resilient demand across its convenience retail and wholesale channels.
“Our primary focus has been on securing supply for our customers in the Australian and New Zealand markets,” Ampol said on Wednesday.
But the ramifications of the closure of the strait continue to present challenges.
“There is considerable uncertainty regarding the impact and duration of the conflict, as well as the rate at which fuel supply chains can recover,” Ampol said.
The Lytton refinery processes “light sweet” crude – as measured by the Brent price, reflecting sulphur content – which is easier to process than standard Persian Gulf “sour” crude, although it tends to cost more.
“Consequently, suitable crudes for Lytton remain available in market, with crude purchases secured into July in line with normal purchasing patterns, albeit at higher landed cost,” it said.
Australia’s other refinery owner is Viva Energy, which operates the Geelong refinery in Corio, Victoria.
That refinery was damaged in a fire earlier in April and the site is not expected to return to close to full capacity for a couple of weeks.
Together, the Geelong and Lytton refineries account for about 20 per cent of Australia’s on-ground fuel supplies.
Ampol shares were up 4.4 per cent to $32.99 in morning trading on the stock exchange.