The only way to prevent the current oil supply shock from escalating into a national crisis is the central coordination of Australia’s critical supply chains. This is not a policy preference; it is an operational necessity.

The Prime Minister’s announcement yesterday to support the freight and logistics sector is a welcome and timely step. Freight is the backbone of supply chains, and stabilising transport capacity will help ease some of the immediate pressure on the movement of goods across the country.

But this alone is not enough. The scale and nature of the current disruption go far beyond freight.

The US-Israel war on Iran has already triggered a severe shock to global energy systems. With production constrained and key transport routes disrupted, the market is simultaneously facing reduced supply and restricted flows. Prices have surged and volatility is expected to persist, with no clear end to the conflict in sight.

Australia is now entering a phase of systemic stress. These global shocks are already filtering through supply chains, affecting fuel availability, food distribution, and the delivery of essential goods. The pressure is system-wide and building.

What makes this situation particularly dangerous is that supply chains are not designed to absorb sustained shocks of this magnitude. They rely on coordination, timing and predictability across interconnected stages: imports, ports, storage, transport, distribution and retail.

When one part is constrained, the effects ripple quickly. When multiple parts are disrupted at once, the system begins to strain.

On one side, supply constraints are pushing costs up and limiting availability. On the other hand, uncertainty is shaping behaviour. Businesses and consumers are adjusting by ordering more, holding more and reacting earlier. These responses are individually rational, but collectively they amplify pressure across the system.

That is exactly what is happening now. While supply has been disrupted over the past four weeks, fuel distributors and transport operators have begun increasing their fuel orders and topping up storage earlier than usual, in anticipation of further price rises and potential shortages linked to the disruption in the Strait of Hormuz. At the same time, motorists in several cities have responded to rising prices by filling tanks more frequently.

This combination of precautionary behaviour is already creating short-term spikes in demand at terminals and service stations, placing additional strain on distribution schedules that were designed for stable, predictable consumption.

The result is a compounding effect: disruption feeding disruption.

Focusing on a single segment of the supply chain – even one as critical as freight – cannot fully address the problem. Without coordination across the entire system, improvements in one area can be offset by breakdowns in others.

Australia’s supply chains are highly fragmented. Responsibilities are split across jurisdictions, agencies and private operators, each acting on partial information and local priorities. In stable conditions, this works. Under disruption, it creates gaps, duplication and misalignment.

This is where disruption becomes dangerous. Without national coordination, there is no mechanism to prioritise critical sectors, no unified visibility of where shortages are emerging and no way to synchronise responses across the system. Freight may be supported, but fuel allocation, inventory management and demand signals will remain unaligned.

That is how manageable shocks escalate into national crises.

What is needed now is a nationally coordinated response that goes beyond sector-specific measures, consistent with the four-stage preparedness and response framework outlined in the National Fuel Security Plan.

Australia must establish a central supply chain “control tower” with real-time visibility across fuel imports, inventories, logistics capacity, and demand patterns. This would enable coordinated decision-making across jurisdictions, ensure that scarce resources are directed to essential sectors and provide clear market signals to reduce panic-driven behaviour.

Right now, as fuel supply tightens and costs rise, freight operators, supermarkets and other industries are independently adjusting their operations. Some secure additional fuel contracts, others delay shipments or pass on costs. A national control tower could provide visibility into these fragmented responses, allowing government and industry to prioritise fuel allocation to critical freight routes, such as those supplying major supermarket distribution centres and hospitals, while coordinating delivery schedules across states.

Instead of each operator reacting in isolation, the system could direct limited capacity where it is most needed to reduce bottlenecks and prevent disruptions in essential goods reaching shelves.

Importantly, this is not just about responding to the current disruption. There is no certainty around how long the current conflict will last or how it may evolve. Future disruptions – whether geopolitical, environmental or economic – are not a question of if, but when. Establishing a national coordination capability now is an investment in future resilience.

The current initiative is a step in the right direction. But treating this disruption as a temporary issue risks underestimating its potential to escalate.

This is not just a freight problem. It is a whole-of-system challenge.

National coordination is no longer optional. It is essential. Not only to manage the disruption we are facing today, but to ensure Australia is prepared for the disruptions of tomorrow.

Ben Fahimnia is a Professor and Chair in Supply Chain Management at the University of Sydney, and Director of the Supply Chain & Logistics Association of Australia.

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