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Key Points
- Iran’s retaliation could disrupt oil supplies, causing inflation in Australia.
- Petrol may increase by 25c/L if oil prices reach $100–$150 a barrel, according to AMP’s Shane Oliver.
- A rise in petrol prices is expected to affect airfare costs, though not immediately.
“If Iran successfully blocks the Strait of Hormuz, it would lead to a significant spike in oil and petrol prices with a severe economic impact.”
“The price of airfares could go up, as well as plastic prices, which affects a lot of household goods.”
The Strait of Hormuz serves as a key conduit for oil and liquefied natural gas (LNG) from the Middle East to global markets through the Arabian Sea and the Indian Ocean. Source: Anadolu / Murat Usubali/Anadolu via Getty Images
Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East.
“Previously, there were several options to recover delays and keep on schedule, but now there is a very narrow margin to recuperate delays, offering less error tolerance for airlines.”
