If you're like the average person, you probably haven't paid much attention to the Strait of Hormuz or the price of a barrel of oil up until a few weeks ago.
But with two long weekends and the school holidays approaching, the rising price of oil might have you looking nervously at any travel - or even daily commute - plans.
In this article
- How does oil from the ground become petrol in your car?
- Why is petrol getting so expensive?
- What are the downstream impacts of expensive oil?
- Will the fuel shock speed up the switch to EVs?
- What's it like to own an electric vehicle?
- Which electric vehicle companies are in the Spaceship Voyager portfolios?
- What can you do in the meantime?
How does oil from the ground become petrol in your car?
This is the short version.
Oil starts in the ground. Geologists, who are scientists that study the Earth, use different methods to predict where the oil is hiding out. Oil companies use exploratory wells to confirm its presence, then drill development wells for various reasons, including to produce oil.
The oil gets extracted from the ground, sent to a separator to take out the water and natural gas, and then gets transported to refineries that use heat to process it into petroleum products. Heavy liquids separate to the bottom, and the gases rise to the top. The oils get processed further into products such as gasoline, which then gets stored in tanks, before being transported by pipelines, trains, trucks and ships.
Australia relies on international shipping to receive most of our oil - we import around 90% of it, according to Geoscience Australia. The oil arrives in Australia via huge ships known as oil tankers, from which it gets discharged to on shore storage tanks. Sometimes ethanol gets added. Then special tankers transport it to petrol stations, where it's usually stored underground until you drive up to the pump ready to fill your car.
So you can see that there are a lot of steps involved to produce the product that fuels so much of modern life.
Why is petrol getting so expensive?
Iran borders the Strait of Hormuz, which is a big shipping waterway that 20% to 25% of the world's oil passes through. Currently, there are severe restrictions on the tankers that are allowed through. And according to the BBC, the tankers aren't just carrying oil, but also natural gas and fertiliser one way, and food, medicine, and technological supplies the other.
Recently the cost of crude oil has spiked. Crude oil was around $62 per barrel about a month ago, and it's $97 per barrel at the time of writing, 23 March 2026. The average barrel of oil holds around 160 litres, and about half of that becomes petrol.
When the supply of petrol is restricted, suppliers can charge more for it, and prices rise. Petrol's known as an inelastic good, which means that consumers will pay up for it even if the price rises.
Your life doesn't immediately change just because the cost of petrol rises. It just gets more expensive.
What are the downstream impacts of expensive oil?
People are freaking out that the situation is going to get worse, particularly as the conflict in the Middle East continues. Closer to home, as Aussies see the cost of a tank of petrol jump up, the government has warned us not to panic buy, while the International Energy Agency has recommended we work from home to save oil demand.
Expensive petrol impacts more than just your bank balance at the servo.
Australia's a massive country. Our road freight industry alone is expected to reach a market size of USD $44.98 billion in 2026, per Mordor Intelligence.
Anything that gets delivered via road, air, or shipping could be reasonably at risk of becoming more expensive as businesses factor in fuel prices. Businesses that produce and deliver goods will see increased costs, which can flow on to increased prices for consumers. United Airlines, the American airline, released a memo to its staff outlining a 5% reduction in planned flights for the year, and said that they've been game planning a scenario where oil rises as high as $175 per barrel and stays elevated until next year. (They said it may not get that severe, but it's good to be prepared.)
Unfortunately, oil and inflation tend to go hand in hand. And as the last couple of years have shown, it often leads to increased interest rates as central banks try to get it back under control.
Will the fuel shock speed up the switch to EVs?
Electric vehicles are becoming more common on the road and the recent fuel price shock has tipped people into research mode.
Generally, electric vehicles have been more expensive to buy than fuel vehicles. But over the past few years, increasing competition in the sector has brought the prices down to more affordable levels.
The NRMA reported the top six reasons people were buying electric vehicles and they included lower running costs, increased fuel security, to reduce greenhouse gases and to have quieter, smoother journeys.
What's it like to own an electric vehicle?
We asked Spaceship engineer, Law.
Charging at home overnight means I wake up to a full battery every morning, which beats stopping at a servo. One thing that surprised me was that software updates added features and performance changes over time.
The upfront cost was higher for me, but lower running costs have helped offset some of that sooner than I expected." — Law, Spaceship engineer
There are downsides, of course. EV range, charging times and charger availability can be drawbacks for some drivers compared with petrol vehicles, depending on how and where they drive.. The battery life can also be variable. "Your car's actual range will differ depending on driving conditions and style; it will drive a lot further on a sunny day in city traffic than it will on the open road under wet and windy conditions," says the NRMA.
EVs also tend to have a higher upfront purchase price than many petrol vehicles, although prices vary widely by model, age and condition.
Insurance may also be higher for some EVs, depending on the vehicle and insurer. And if you don't have an at-home charger, you have to drive to a public one, and these can be inconsistent and unreliable.
Which electric vehicle companies are in the Spaceship Voyager portfolios?
Some Spaceship Voyager portfolios currently hold companies with exposure to electric vehicles and adjacent technologies. Let's take a look.
Tesla
Tesla was founded in 2003, with the mission to accelerate the world's transition to sustainable energy. Its products have included electric cars, batteries, and solar energy panels.
We first invested in Tesla in our Spaceship Universe Portfolio in 2018, and it's also in our Spaceship Earth, Spaceship Origin, and Spaceship Galaxy portfolios at the time of writing 24 March 2026.
BYD
BYD stands for Build Your Dreams. It's a large electric vehicle company. It started life in 1995 as a battery manufacturer that powered mobile phones and digital cameras. In 2025, BYD became the world's largest electric vehicle supplier. BYD has vertical integration which means it creates almost everything from lithium mines to batteries, semiconductors, and electric vehicles. It's based in China.
We first invested in BYD in our Spaceship Earth Portfolio in 2025.
Uber
Uber might surprise you. It's a contender in the cybertaxi race, which is still in its infancy. Uber has a partnership with another electric vehicle company called Rivian and it wants to have 10,000 fully autonomous Uber taxis on the road by 2028.
We first invested in Uber in our Spaceship Universe Portfolio in 2020 and it's also in our Spaceship Galaxy Portfolio at the time of writing 24 March 2026.
Alphabet/Waymo
Waymo's fully electric fleet of robotaxis transport 450,000 paid rides per week. Alphabet is the parent company of Google. Here are some other bets it's made.
We first invested in Alphabet in our Spaceship Universe Portfolio in 2018 and it's also in our Spaceship Origin, Spaceship Galaxy and Spaceship Earth portfolios at the time of writing 24 March 2026.
What can you do in the meantime?
Even if electric vehicles are the future, petrol's still expensive now.
Here are some tips for getting through elevated petrol prices. You've probably heard them before, we know, but there may be one or two you can use.
See if your town has a bike library
Some major cities do. If you don't already own a bike, you might be able to borrow one to take to the shops or other places you'd normally drive. The ACT, New South Wales, and Victoria are all states that have bike libraries.
Hypermile
It's when you drive efficiently to maximise your fuel. Here's an old post from Mr Money Mustache that shows how far some people go. Hypermilers use such tactics as optimising the air in their tires, removing unnecessary items from their car to save on weight, and even skimping on using air con and the stereo. You don't have to go that far, but desperate times can call for desperate measures.
Avoid driving in peak hours
If you have to drive, drive outside of peak hours to avoid traffic congestion that could cause you to idle in traffic, using up more of your fuel.
Check your fuel price apps
At the time of writing, Petrolspy app is reporting a 13c per litre difference in the price of E10 fuel between two servos three suburbs apart. It's worth seeing what the prices are around you if only to avoid bill shock when you get to the pump.
Park in the shade
Fuel evaporates in the heat, and using your air con uses more petrol. So when you park in the shade and avoid having to blast your air con the moment you get in your car, you actually save fuel. It might not be much, but it all adds up.
Want to learn more about the companies in the Spaceship Voyager portfolios? Get to know the Spaceship Voyager portfolios including portfolio information, risks, fees, and product docs.
Some of our Spaceship Voyager portfolios invest in Tesla, BYD, Uber and Alphabet at the time of writing.
Important! We're sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it's important (and interesting!) to let you know what's happening with Spaceship Voyager's investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn't a reliable indicator or guarantee of future performance.
The information in this article is prepared by Spaceship Capital Limited (ABN 67 621 011 649, AFSL 501605). It is general in nature as it has been prepared without taking account of your objectives, financial situation or needs.
