The agreement commits both countries not to impose export restrictions on each other during economic upheaval. But it also highlights an uncomfortable reality facing New Zealand’s energy security, which depends heavily on fuel stored and refined overseas.
Nearly 60% of the country’s petroleum reserves are held offshore in countries such as the United States, Japan and the United Kingdom, and around a third of its fuel is refined in Singapore. As global tensions disrupt oil markets and put pressure on key shipping routes, that model is being tested.
In emergencies, the IEA can coordinate collective stock releases to stabilise global markets, as occurred in the agency’s release of 400 million barrels of oil in March.
However, a closer look at the data shows New Zealand is a clear outlier in how it meets these obligations.
To remain compliant, the New Zealand government buys “ticket” contracts – or contractual claims on oil stored in other countries.
While these count toward the country’s 90-day requirement, they are effectively rights to purchase fuel that may never reach its shores during a major disruption, such as the closure of the Strait of Hormuz.
In January, New Zealand’s total petroleum reserves stood at exactly 90 days’ supply. This meets the IEA’s minimum requirement, but is the second-lowest reserve among members, ahead of only Australia’s 49-day capacity.
New Zealand’s total petroleum reserves (government and industry combined), shown as the number of days the country could cover its fuel imports, compared with other IEA countries in January 2026.Author provided, CC BY-NC-SA
New Zealand is also the only IEA member whose public oil reserves are fully overseas.
By contrast, countries such as Japan and South Korea hold around 200 days of reserves domestically, leaving them far better prepared for global supply shocks.
Share of petroleum reserves held overseas (including both industry and government stocks) as a percentage of total reserves, January 2026.Author provided, CC BY-NC-SA
It comes after New Zealand’s heavy reliance on offshore reserves has grown sharply over the past 15 years.
IEA data shows the country’s domestically-held industry stocks made up more than 90% of reserves in 2010–11, while public offshore holdings accounted for less than 10%.
By 2026, that balance had flipped. Industry stocks had fallen to 42%, while government-owned reserves held abroad had risen to 58%.
Share of New Zealand’s petroleum reserves held onshore by industry versus government-owned reserves held offshore, as a percentage of total reserves, 2008–2026.Author provided, CC BY-NC-SA
As companies cut physical inventories to reduce costs, the government filled the gap with ticket contracts to maintain compliance with the IEA’s 90-day requirement.
This shift effectively means New Zealand’s domestic resilience has been hollowed out. In January, for instance, the country held just 38 days of onshore petroleum stocks – far below the average of IEA members and of other Asia-Pacific nations.
The Government’s plan to build a Liquefied Natural Gas (LNG) port is unlikely to make electricity any more affordable, according to the OECD.
The OECD, an organisation consisting of 38 of some of the world’s richest counties, released its 2026 report on New Zealand’s economy.
It raised major concerns about the energy sector and ageing population, while suggesting that the Government should introduce a capital gains tax. The tax system, it argued, favoured investment in housing and discouraged people from investing in shares and companies, which in turn made it harder to start and expand a business in New Zealand.
Stuff
…we have been conned into accepting the hollowed out neoliberal public service that subcontracts its obligations out while milking monopoly rentals.
We saw it with Wellington Water, we see it in our electricity market, we see it with the Australian Banks, the Irex Ferry cancellation, the Supermarket duopoly, early childhood education – everywhere we have monopoly, duopoly, oligopoly to prop up a Plutocracy who buy the regulation they demand from National, ACT and NZ First…
..now, as shit hits the fan, the free market system we have mutated into only looks after those who can pay.
User pays means the poor pay first
Rather than raising taxes on the mega-wealthy and their activities, National, ACT and NZ First have cut taxes for their wealthy donors so the State doesn’t have the resources to pay for the infrastructure that is crucial for the system to operate for everyone.
User pays is fine for the wealthy right, because they have the disposable income to shelter from energy inflation, the vast majority however do not.
We have a fully fledged class war in New Zealand, but because the outrage Olympics of Identity Politics by middle class activists, is all the Left knows, how to play anymore. They don’t have the political vocabulary to explain what is happening.
What is even more reprehensible is the failure to develop local, more renewables, over the last few decades. Muldoon identified the haemorrhage of foreign exchange, implicit in buying overseas oil. His solution appeared logical for his time. Now we have better options.
A failure which can be sheeted home to the “market model” of electricity supply introduced by National, the Bradford “reforms”. Later National Governments antipathy to supporting alternative energy sources, have exposed us even more.
Current magical fantasies, of finding the economic quantities of local supplies of oil and gas which hasn’t been found over 100 years of exploration, are making things worse.
What is even more reprehensible is the failure to develop local, more renewables, over the last few decades. Muldoon identified the haemorrhage of foreign exchange, implicit in buying overseas oil. His solution appeared logical for his time. Now we have better options.
A failure which can be sheeted home to the “market model” of electricity supply introduced by National, the Bradford “reforms”. Later National Governments antipathy to supporting alternative energy sources, have exposed us even more.
Current magical fantasies, of finding the economic quantities of local supplies of oil and gas which hasn’t been found over 100 years of exploration, are making things worse.