Why Australians should brace for even higher energy prices in November

• Aussie petrol prices have climbed from around $1.70 a litre in February to $2.40, placing further strain on household budgets.
• A US military buildup in the Middle East has raised concerns about a further escalation in the conflict with Iran.
• Higher oil prices in November could mean more expensive petrol and airfares ahead of the summer holiday season.

As we look to November, I’d love to tell you Australia’s energy costs are likely to fall heading into 2027.

After all, motorists have already watched the price of regular unleaded petrol surge nationally from around $1.70 a litre in February to around $2.40 a litre today. That’s a big hit for commuters and families planning road trips over the holidays.

Soaring fuel prices are also driving broader inflation across the economy by raising manufacturing, freight and farming costs.

As you’re likely aware, the big price surge is driven by the ongoing conflict in the oil-rich Middle East.

Before the US war with Iran broke out on February 28, Brent crude oil was trading at US$71 per barrel. Oil prices peaked above US$114 in early May, with Brent at US$104 at the start of this week.

Unfortunately, rather than seeing costs decline in November, I believe Australians would do well to prepare for even higher fuel prices in the month ahead.

Why Middle East tensions could flare in November

November 3 marks more than just Melbourne Cup Day this year. It also marks the day of the US mid-term elections.

That’s important, because the conflict with Iran is becoming increasingly unpopular with US voters.

And President Donald Trump has assured Americans that there will be no major escalation in the conflict with Iran prior to the midterms.

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After that, however, all bets are off.

Indeed, asked about Iran over the weekend, Trump said, “We could end it really quick. They don’t know how nice I’ve been to them.”

With polls showing Democrats are favoured to retake control of the House of Representatives, he’ll have an even greater incentive to “end it really quick”. 

That’s because any newly elected representatives in Congress won’t take up their posts until January 3.

This will leave Trump with two months in which Republicans hold a majority in both houses, regardless of the election outcome.

The not-so-secret US military buildup

Prior to the joint US and Israeli air strikes on Iran on February 28, the US moved two aircraft carrier strike groups into the region, representing its largest naval presence in the area in 23 years.

Mirroring that buildup, the US now has a third aircraft carrier strike group heading to the Middle East. The fleet is reportedly carrying around 2,000 Marines and more than 7,000 sailors and pilots.

Reports indicate the new strike force should be in position before the end of the month, ahead of the November 3 mid-term elections.

Now, one can only hope this display of force is enough to bring the Iranian regime back to serious peace negotiations. But history suggests that’s unlikely.

Indeed, over the past week alone, Iranian-backed Yemeni Houthis have launched several strikes on Saudi Arabia’s international airport in Riyadh, causing numerous deaths and injuries. Previous attacks have targeted Saudi energy assets.

While Trump has not yet committed to strike the Houthis, he said the US was prepared to “move very quickly” once it made a decision.

A diesel deal with Putin

In other potentially concerning news, Trump revealed over the weekend that – in an agreement with Russian President Vladimir Putin and decried by Ukrainian President Volodymyr Zelenskyy – Russia will release 1.8 million tons of its diesel stockpiles into “the American and Global Marketplace.”

Trump aims to lower soaring diesel prices in the US, which could help win over some key, disgruntled voting blocs before the November 3 midterms.

But you have to ask yourself, if Trump is aiming for a near-term peace deal with Iran, why did he just ink a diesel agreement with Putin? And why the third aircraft carrier strike group?

What now?

While you and I can’t control the outcome of the Middle East conflict, we can prepare for even higher potential energy costs in November and December.

If you’re not driving an EV and are planning a holiday road trip, budget a little extra for those fill-ups.

And if you’re planning to travel by air, you may want to lock in some bargain flights sooner rather than later. That’s because jet fuel is one of Qantas’s and other airlines’ highest operating costs. If global oil prices rise again in November, airfares could tick higher.