Since conflicts first broke out in Ukraine in late February, global crude oil prices have surged to a record high since 2008.
Brent rose 11.67 U.S. dollars, or 9.9 percent, to 129.78 dollars a barrel by 6:50 p.m. EST (2350 GMT), while U.S. West Texas Intermediate (WTI) crude rose 10.83 dollars, or 9.4 percent, to 126.51 dollars, putting both contracts on track for their highest daily percentage gains since May 2020.
John Quiggin, a prominent research economist and Australian economic policy commentator from the University of Queensland, told Xinhua that every 10 U.S.-dollar increase per barrel in crude oil prices translates to about a 10-cent increase per liter of petrol prices in Australia.
On Monday, the Australian Institute of Petroleum's weekly price report showed Australia's average petrol price had reached 183.9 Australian cents per liter (about 136 U.S. cents), more than 10 cents higher than what it was a month ago.
JP Morgan said last week that oil prices could see historic highs this year, as high as 185 dollars per barrel. This could see prices in Australia reach 2.10 Australian dollars (about 1.56 U.S. dollars) per liter, according to experts.
"What we're seeing in the short run is big increases in the price of all the hydrocarbon fuels, coal and gas, coming on top of already high prices because of a bunch of other factors," it said.
Similarly, other commodities that Australia is a net exporter of, such as high-quality coal and liquefied natural gas, saw surges in the range of 40 percent over the last week.
Quiggin said that while this would provide a short-lived boom to particular industries, ultimately the disruption, which the conflicts would bring on the global economy, would be a net negative.
"Although they (Ukraine and Russia) are a long way away from us, and we don't have much trade with these countries, it is going to be a huge amount of economic disruption" regardless of how the conflicts pan out, he said, adding "and that's not going to be good for anybody."
Mariano Kulish, an economist at the University of Sydney, told Xinhua that "not all commodity price shocks are the same," indicating that the primary driver of current economic instability would be uncertainty around the duration of the conflicts in Ukraine.
"Consumers and businesses make decisions based on more permanent things ... if it's a temporary increase, it is likely to have less of an impact than if this is a sustained increase," he said, adding that volatile commodity prices would likely deter investment and consumption, which in turn would stagger economic growth.
"When all prices increase, consumers pull back and have to spend more money on transportation that they would have spent on other goods, so that contracts economic activity," Kulish said.
Liam Wagner, an associate professor in energy from the University of Adelaide, told Xinhua despite petrol being the main focus of rising energy prices in Australia, diesel, which also comes from crude oil, would have the largest impact on rising costs.
"I think that the real pinch is going to come with food prices," Wagner said. "The price of diesel is going to go up quite significantly, and as a consequence, all food is going up."
This is because diesel is needed at every stage of Australia's food supply chain, from transport and processing to agriculture equipment.
"There's been an increase in GDP (as Australia recovers from the pandemic), coming off a low base, but with this shock of oil prices going up so high, and so quickly, we'll start to see they're having an effect on the economy quite significantly," he said.
Experts agreed that current global energy instability would push countries, including Australia, towards renewable energies.
"I think we'll see many companies, particularly large transport companies, wanting to find other (non-diesel) options," Wagner said, while warning that without consistent energy policies, the transition would be chaotic if just done in response to sudden shocks.
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