The festival, organised by major industry player TEG Live, was to have starred Australian DJ FISHER in May.
"I'm really bummed at the moment, at what is happening. And no one more than me would like to put on this show for you guys," he said in a statement.
OUT 2 LUNCH started on the Gold Coast's Coolangatta Beach in 2024, and was to have toured nationally for the first time, adding events in Melbourne, Sydney and Perth.
TEG Live announced on Friday the festival would be put off until 2027, with existing tickets remaining valid, and refunds also available.
The company, which is part of the massive Ticketek Entertainment Group, said acute diesel shortages and fuel delivery delays caused by the Iran war were behind its decision.
The expansion of the festival to four large-scale events held over nine days meant considerable challenges with trucking logistics, power generators, production infrastructure and other services, it said.
The company also cited economic pressures on music fans due to the cost-of-living crisis, inflation, and broader uncertainty.
"Given the severe pressures on fuel supplies and consumer sentiment right now, we have to do the right thing and postpone the festival so that greater needs can be prioritised during this critical period, which we understand will be most acute during the next 6-8 weeks," said TEG Live global head of touring Tim McGregor.
The festival joins a long list of Australian music events that have been cancelled or postponed, with the most recent being Byron Bay Bluesfest and the 2026 Big Red Bash.
Other big music events to bite the dust include Splendour in the Grass, Groovin the Moo, and the Falls Festival.
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