An expected surge in global oil prices following US and Israeli missile strikes on Iran is set to flow through to Australian petrol pumps, adding significant pressure to household budgets already straining under high inflation and rising interest rates.
Economists warn that the conflict is "bad news" for consumers, who will pay higher prices at the bowser and for oil-exposed goods.
Rystad Energy forecasts oil prices to soar US$20 a barrel, with senior vice president Jorge Leon noting that the halt of traffic through the Strait of Hormuz—carrying about 15 million barrels per day—means "the net impact remains an effective loss of 8-10 million barrels per day of crude oil supply."
AMP chief economist Shane Oliver stated that the "rule of thumb" suggests a US$10 rise in oil prices adds about 10 cents a litre locally, potentially pushing Australian prices sustainably above $2 a litre.