The recent drone attack on Saudi Arabian oil refineries has raised fresh concerns that Australia is not meeting our obligation to the International Energy Agency to maintain oil stocks equal to 90 days of consumption. Among other things, it has been suggested that the defence forces might run out of fuel.

This all sounds alarming. But a moment’s thought raises more questions than answers. Why should the adequacy of our oil stocks be a matter of international concern? And why oil, rather than, say, essential medical supplies? Is a 90-day stock the right amount for Australia?

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A bit of history helps. These agreements date back nearly 50 years, to the oil crisis of the early 1970s. The crisis arose when the Yom Kippur war between Israel and its Arab neighbours, Egypt and Syria, coincided with a massive boom in commodity markets and an ill-fated wage-price freeze in the US. The commodity boom shifted the balance of market power from a cartel of oil companies (the “Seven Sisters”), which had held prices artificially low, to a cartel of nations, the Organization of Petroleum Exporting Countries (Opec). Opec was dominated by Arab countries, most notably Saudi Arabia.

In the normal course of events, the result of the market shift would have been a sharp increase in prices, followed by a gradual decline, as cartel members quietly raised their sales above the agreed quotas. And, in the long run, that’s exactly what happened.

In the short run, two dramatic events intervened. First, in October 1973, Opec happened to be meeting just as the Yom Kippur war broke out. With the Arab countries losing badly, their Opec imposed an embargo on oil exports to Israel’s backers, most importantly the United States. Although the embargo had only limited success (the ultimate settlement of the war was highly favourable to Isreal), it gave enduring force to the idea that control of oil supplies was a powerful strategic weapon.

The second event was the failure of the US system of wage and price controls imposed by the Nixon administration in 1971. The controls were removed in 1973, with a single exception. Controls on gasoline prices remained in force until 1974, and were not fully removed until the 1980s. The inevitable result of holding prices far below the market level was a lengthy and painful period of rationing. However, the blame for this exercise was not placed on Nixon’s attempt to defy the logic of markets, but on the evil machinations of Opec.

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It was in this context that the idea of oil as a magical commodity immune from the normal logic of economics took hold of both the popular and the bureaucratic imagination.

How likely is it that Australia could be cut off from access to oil supplies? To begin with, it’s useful to observe that, in the decades since the oil crisis, no exporting country or alliance has ever been successful in imposing an embargo for geopolitical reasons. The most notable attempts have been Russia’s attempt to coerce Ukraine by cutting off supplies of natural gas, and China’s restrictions on the supplies of so-called “rare earths” to Japan.

Both caused some initial inconvenience, but neither achieved their political goals. The longer-term effect was a loss of markets, as buyers sought out more reliable suppliers.

In this context, it’s worth noting that we import all our cars, and nearly all our parts, mostly from a small number of Asian countries . If these supplies were cut off long enough, we would truly be immobilised. Yet we have no national policy, and certainly no international agreements, mandating any particular level of stocks.

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By contrast, we produce around half of the oil we consume, and no one country has more than marginal power to influence the world market, or to restrict supplies to Australia. The recent attack, which knocked out half of Saudi Arabia’s refining capacity, illustrates the point. This shock increased oil prices by around 15%, which might ultimately raise Australian petrol prices by about 10 cents a litre. That’s about half the variation generated every few weeks by the absurd price cycles with which we have lived for years.

Finally, there’s the idea that if we run out of petrol the ADF would be immobilised. Certainly, it’s desirable that the ADF should maintain stocks sufficient to enable it to function in the event of a wartime cut-off of supplies. But that’s a problem that should be addressed by the ADF itself, not by a general policy applying to the entire economy.

Rather than worrying about our stocks of petrol, we should be focused on ending our dependence on oil. That would require fuel efficiency targets in the short run, and electrification of the vehicle fleet by the 2030s. The current government has rejected the first of these policies and derided the second. The costs of this inaction will come back to haunt us.

• John Quiggin is professor of economics at the University of Queensland. His latest book is Economics in Two Lessons: Why Markets Work so Well, and Why they can Fail so Badly