Overview

The latest global energy shock – triggered by conflict in the Middle East and unprecedented disruption to flows through the Strait of Hormuz – is not just a supply and pricing issue. It is rapidly becoming a work health and safety (WHS) issue that boards cannot afford to overlook.

The International Energy Agency has described the situation as the largest supply disruption in the history of the global oil market. Oil flows through the Strait have collapsed from around 20 million barrels per day to a near standstill, while global LNG supply has dropped by roughly 20 per cent.

The consequences have been immediate and severe. Oil prices have surged, with Brent crude rising about 55 per cent since late February 2026, while European gas benchmarks have jumped even higher.

These are not abstract market movements – they are feeding directly into operational risk across industries.

A board-level WHS issue

In Australia, the effects are already being felt. Prime Minister Anthony Albanese acknowledged that prolonged conflict will affect supply chains, fuel prices and the wider economy. At the same time, the Australian Competition and Consumer Commission has reported rising petrol and diesel prices alongside localised shortages.

For boards and executives, the instinctive response is often to focus on cost control, continuity planning and margin protection. But this is only part of the equation.

Rapid operational adjustments in response to fuel constraints can introduce new and sometimes unforeseen WHS risks.

Evidence from major incidents consistently shows that cost pressure and operational disruption are when safety systems are most vulnerable.

The hidden safety risks of recommended demand-side measures

The IEA has outlined a range of demand-side measures aimed at reducing fuel consumption, from increased remote work to reduced speed limits and changes in transport usage.

Many of these measures appear straightforward. In practice, they can materially alter risk profiles across a business.

Consider just a few examples:

• Increased working from home arrangements may heighten psychosocial risks, including isolation, fatigue and blurred work boundaries.
• Reduced transport availability or altered rostering can lead to extended working hours, fatigue and worker stress.
• Shifts toward alternative logistics or delivery models may introduce unfamiliar hazards, particularly where contractors or new supply chains are involved.
• Pressure to maintain output amid rising costs can unintentionally cause workers to bypass existing safe systems of work.
• Energy price shock leads to financial stress and safety shortcuts (for example deferring maintenance, reducing safety resourcing, cutting contractor oversight, pushing workers harder).
• Supply chain disruption leads to chemical and material shortages (potential shortages of industrial gases, lubricants, specialty chemicals and materials that underpin safe operations.  Substituting products, changing procedures, working with unfamiliar materials all create hazard management obligations under WHS laws).
• Rising diesel and fuel costs cause pressure on transport operators, logistic contractors, mobile plant operators to reduce idle time, extend shifts and delay servicing.  Fatigue, deferred maintenance and route risk are all direct WHS risks.
• Workforce mental health and financial well-being is also impacted.

None of these risks are new in isolation. What is new is the speed and scale at which organisations may implement change in response to external shocks.

Governance expectations are clear

Boards should be asking:

• How are fuel-related disruptions altering our risk profile?
• What new hazards are being introduced through operational changes?
• Do we have visibility over frontline impacts, not just executive assumptions?

A failure to interrogate these questions can expose organisations not only to safety incidents, but also to regulatory scrutiny and reputational damage.

Practical steps for boards and executives

Against this backdrop, there are several immediate actions boards should consider.

• Review the enterprise risk register: Energy volatility is not just a financial risk. It should be explicitly recognised as a driver of operational and WHS risk, with clear linkages mapped.

• Assess WHS impacts of all response measures: Any initiative aimed at reducing fuel usage or costs – whether changes to logistics, travel, rostering or remote work – should be subject to a structured WHS assessment before implementation (for example, review scheduling practices, protect maintenance budgets, audit contractor  transport operators, brief schedulers and transport managers).

• Use consultation frameworks effectively: Worker consultation is not a procedural step – it is a critical part of the risk assessment process. Engaging with employees and health and safety representatives can surface unintended consequences early, before they happen.

• Strengthen monitoring and assurance: In rapidly changing conditions, lag indicators are insufficient. Boards should seek more frequent and leading indicators of safety performance, particularly in higher-risk operations.

• Don't forget the psychosocial impacts: Guidance highlights that psychosocial risks increase during periods of uncertainty, including job insecurity, increased workloads and operational change, so consider psychosocial risk assessments.

Resilience is built before the crisis

The current disruption is a reminder that energy security shocks are not hypothetical. They are real, fast-moving and capable of cascading through every layer of an organisation.

For boards, the lesson is clear: resilience is not just about securing supply or managing cost. It is about ensuring that, in the rush to adapt, safety is not compromised.

For more information or assistance, please contact our Employment, Health and Safety team.