Federal government mulls fresh fuel excise cuts after major oil pipeline attacked in Saudi Arabia

Fuel excise cuts could be reintroduced after a major oil pipeline was targeted in the latest escalation of war in the Middle East .

Saudi Arabia shut down a key oil pipeline as a precautionary measure after it was attacked by drones from Iran on Thursday.

WATCH THE VIDEO ABOVE: Fuel excise cuts considered as petrol prices climb

Oil prices surged past $100 a barrel after the strikes, and satellite images captures smoke rising from the damaged East-West Pipeline which was designed to bypass Hormuz.

Analysts warn that Saudi Arabia is running out of the work-arounds that have allowed it to absorb disruptions to oil exports that are the lifeblood of its economy, as Iran-backed Houthi rebels threaten to worsen the disruption to global energy supplies.

Houthi forces recently captured historic port city Mocha, and Perim, an island in the middle of the vital Bab el Mandeb Strait.

Bab el Mandeb is a gateway to the Red Sea trade route that links Europe and Asia could further imperil oil exports while granting Iran powerful new leverage in its war with the United States.

Amid the latest threats to global energy supply, the Albanese government has said it is open-minded about cutting the fuel excise again, sources told The Australian.

NRMA spokesperson Peter Khoury said that an open-minded approach is the right strategy for the government to take.

“It’s the best approach because we’re seeing prices increase again,” Khoury said.

“They’re nowhere near as high as they were in April when the last cut was introduced as a result of those record prices.”

Unleaded petrol prices peaked at $2.60 in April, and diesel hit $3.27.

The average price nationally for unleaded is currently about $2.11 to $2.12, with diesel sitting at about $2.60, the highest petrol has been in five months.

Khoury warned motorists against hoarding fuel should another fuel excise cut be introduced.