The US-Israel war on Iran has triggered a profound global crisis, escalating military tensions and causing severe economic repercussions, particularly concerning the Strait of Hormuz. US President Donald Trump publicly expressed his surprise and frustration with allies like Australia, Japan, South Korea, and NATO members for their reluctance to send warships to aid in reopening the critical waterway. Trump lambasted NATO allies as “cowards” for not joining the fight to secure the Strait, claiming the US had always reciprocated their requests. However, Australian Prime Minister Anthony Albanese countered, stating Australia had provided requested support, including E-7 Wedgetail aircraft and air-to-air missiles, but had not received a specific request for warships for the Strait. Australia, along with other allies, had signed a joint statement coordinated by the UK, urging Iran to cease threats to shipping.

The United Kingdom initially joined this non-committal stance but later performed a significant “U-turn.” Prime Minister Keir Starmer eventually approved the use of British bases, RAF Fairford and Diego Garcia, for US offensive operations to strike Iranian targets blocking the Strait of Hormuz. This decision deepened the UK’s involvement, despite criticisms from opposition leaders about being dragged further into the war without parliamentary debate. NATO itself had withdrawn its advisory mission from Iraq, and Trump further asserted that without the US, “NATO IS A PAPER TIGER!”

The de facto closure of the Strait of Hormuz, through which approximately 20% of the world’s oil and liquefied natural gas (LNG) flows, has led to drastic global energy shocks. Fuel prices have surged dramatically, with reports of diesel prices above $3 a litre in Sydney, $3.39 a litre in regional New South Wales, and US gasoline prices rising to $3.90 a gallon nationally. The International Energy Agency (IEA) has warned this conflict poses the “greatest threat to global energy supply in the history of the world.” To mitigate domestic impacts, the Australian Competition and Consumer Commission issued an urgent interim authorization allowing fuel companies to coordinate supply, though not pricing. Ride-share companies like Uber and DiDi, along with DoorDash, have implemented fuel relief programs or increased prices to offset rising operational costs for drivers.

Amidst the spiraling oil prices, the Trump administration temporarily waived sanctions on Iranian oil purchases for 30 days, aiming to release approximately 140 million barrels into global markets. This move, intended to relieve pressure on energy supply and prevent economic harm to US businesses and consumers, drew criticism for potentially benefiting Iran’s war effort. Treasury Secretary Scott Bessent defended the waiver, stating it was strictly limited to oil already in transit and designed to keep prices down while maintaining maximum pressure on Iran.

Militarily, the US has intensified its operations to reopen the Strait, with US jets engaging Iranian ships and deploying A-10 Warthogs and Apache attack helicopters to target Iranian watercraft. Additional US Marines and amphibious assault ships have been deployed to the Middle East. President Trump indicated a potential winding down of strikes once specific objectives are met, including degrading Iran’s missile capabilities, destroying its defense industrial base, eliminating its navy and air force, and preventing nuclear capability. However, Iranian officials have defiantly stated their continued missile manufacturing despite US claims of destruction. The conflict has seen 13 US troops killed and over 200 injured, leading to a visible shift in US public sentiment.

The geopolitical landscape of the Middle East has become increasingly volatile. Iran-aligned groups like Hezbollah in Lebanon and Iraqi militias are fully engaged, launching extensive rocket and drone attacks. The Houthis in Yemen and Kurdish forces in western Iran have signaled readiness to escalate, with Kurdish involvement contingent on US support. Gulf states such as Saudi Arabia, Bahrain, Qatar, UAE, and Kuwait have been directly targeted by Iranian strikes. Saudi Arabia has warned its patience is “not unlimited” and reserves the right to respond militarily, while Bahrain, Qatar, UAE, and Kuwait have taken defensive postures and asserted their right to self-defense. Countries like Jordan, Turkey, Oman, Egypt, and Syria have largely maintained neutrality, advocating for diplomacy and de-escalation. Russia and China are identified as pro-Iran, with Russia providing intelligence and China being a major buyer of Iranian oil. Other nations, like India, South Korea, and Taiwan, are at Iran’s mercy due to their reliance on Iranian by-products essential for fertilizers and semiconductors, respectively, raising fears of catastrophic food shortages and economic chaos. The potential for a nuclear escalation, with Iran and Israel possibly targeting each other’s nuclear facilities, represents a “nightmare scenario.”

The economic impact extends far beyond fuel prices. Austrian researchers warn that blockades in the Strait of Hormuz longer than four weeks could trigger