The escalating conflict between Israel and Iran is poised to impact Australian motorists, with petrol prices anticipated to rise in the coming weeks.

Brent crude oil prices have surged from $65 to $77 per barrel over the past week, marking an 18 per cent increase since hostilities intensified. This spike is attributed to Israeli airstrikes on Iranian nuclear facilities and subsequent retaliatory actions, raising concerns over potential disruptions to global oil supplies.

Australian Treasurer Jim Chalmers has warned that sustained high oil prices could exacerbate inflationary pressures domestically. He emphasized that while the immediate focus remains on the human cost of the conflict, the economic ramifications are significant. Chalmers noted that a 10 per cent increase in oil prices sustained over a year could add approximately 0.4 percentage points to Australia’s inflation rate.

AMP Chief Economist Shane Oliver highlighted that if current oil price levels persist, Australian petrol prices could rise by around 12 cents per litre. However, he also pointed out that Australia’s fuel supply, primarily sourced from Asia, may offer some insulation from direct supply disruptions.

The potential closure of the Strait of Hormuz, a critical chokepoint through which approximately 20 per cent of global oil passes, remains a significant concern. Any blockage could lead to further volatility in oil markets, impacting fuel prices worldwide, including in Australia.

Despite these challenges, the Reserve Bank of Australia (RBA) is expected to maintain its course on interest rates, with a potential rate cut anticipated in July. Analysts suggest that the RBA may view the inflationary impact of rising oil prices as temporary, focusing instead on broader economic indicators.

Motorists are advised to stay informed about fuel price trends and consider refueling ahead of potential increases. While the situation remains fluid, the Australian government continues to monitor developments closely, aiming to mitigate economic impacts on households.