Global Impact of the Iran Conflict
The fragile ceasefire in the Iran conflict has led to a situation where the war is largely a war of words. However, its effects are being felt globally, impacting various aspects of life for people around the world.
Personal Stories from Different Regions
Peter Kinson, a 64-year-old retiree living in regional Queensland, highlights the challenges faced by many in remote areas. His local pharmacy closed down suddenly, making it difficult for his wife, who has chronic illnesses, to access her medications. A trip to Longreach for his granddaughter’s psychology appointments adds another 374km round trip each fortnight. The global oil shock caused diesel prices to spike to 330 cents per litre at its peak, with a full tank costing nearly $200. For residents in cities, the impact might be less severe, but for those in rural areas like Aramac, there is no choice but to bear the cost.
In Sri Lanka, drivers like 37-year-old Kelum Dissanayaka face similar challenges. After the war erupted, fuel prices increased by 35 per cent, and he has had to skip lease payments on his tuktuk due to the rising costs. In Dublin, disruptive demonstrations have ended after five days of protests against fuel prices. Plumber Paddy Murray joined the protest, stating that the cost of living has become unsustainable.
In Tehran, Fatemeh Zarei, a mother of two, experienced the direct impact of the conflict when two missile strikes destroyed her family-run grocery store. She emphasizes that the psychological impact has been significant.
Economic and Political Impacts Across Continents
The human and economic impacts of the Iran war have been felt worldwide. Despite the current ceasefire, the ripple effects are far from over. Rajeswari Pillai Rajagopalan, a senior fellow with the Australian Strategic Policy Institute (ASPI), notes that these are uncertain times, and predicting what happens next is challenging.
Asia
Fuel shortages have led to price hikes and travel restrictions across Asia. In Bangladesh, farmers struggle to secure diesel for irrigation during a critical stage of the paddy season. South Korea and Japan rely heavily on oil imports, with Japan releasing 80 million barrels from its national reserves. Vietnam has announced cooperative agreements, including developing nuclear power plants. China sees diplomatic space to reposition itself globally. Japan is expanding its economic statecraft in Asia through a $13.9 billion energy support framework.
Africa
Rising fuel costs and logistics issues through the Strait of Hormuz have affected the delivery of medication to crisis zones in Africa. In Sudan, clinics are unsure about their next shipments. Tanzania has placed government officials under commute restrictions. Nigeria faces increased food insecurity, with 4.1 million more people expected to face acute hunger in 2026. East Africa faces drought and food insecurity, while some experts suggest Africa has unique opportunities amid the conflict.
Middle East
An ongoing internet blackout makes it difficult to speak to citizens inside Iran. Lebanon has seen significant casualties, with 2,869 people killed since March 2. Gulf states have borne the brunt of the conflict, with migrant workers remaining vulnerable. Saudi Arabia expects growth in 2026, but other Gulf countries may see economic contraction.
Europe
Protests against fuel prices in Ireland have led to changes among European airlines. Air France and Lufthansa face billions in jet fuel costs and may raise ticket prices. Soaring airfares and reduced flights have forced Australians to reconsider holidays. Russia benefits from increased crude exports, while the European Commission highlights dependency on imported fuel.
Americas
South American countries face uneven impacts from the global surge in fuel prices. Chile has been hit hard, with fuel prices set to jump significantly. Cuba faces blackouts due to pressure from the US and a blockade on oil from Venezuela. Colombia’s president links the conflict to energy dependence, while Canada faces elevated transport and food prices.
Australia
On budget night, Treasurer Jim Chalmers highlighted the impact of the Middle East war on Australian prices and growth. Fuel shortages contributed to inflation rising to 4.6 per cent, its highest level since September 2023. The Reserve Bank of Australia raised interest rates to 4.35 per cent. The Albanese government has pledged to spend over $10 billion on strengthening fuel security. Australia continues to view the US as a critical security partner.
