The Albanese government has reacted to reports a peace deal between US President Donald Trump and Iran could be finalised imminently, with a Minister warning Australia is “not immune” to global impacts.
On Sunday morning, Mr Trump said a deal with the Islamic Republic was “largely negotiated” after calls with allies including Egypt, the United Arab Emirates, and Pakistan – and Israel, with whom the US began the war.
The deal comes more than a month after a ceasefire put pause to tit-for-tat attacks that had damaged regional petroleum infrastructure and sent global oil prices spiralling after Iran closed the Strait of Hormuz.
Asked about the deal, Assistant Technology Minister Andrew Charlton told Sky News the government had “long been calling for a de-escalation in Iran”.
“We’ve been calling for outstanding issues to be negotiated, and that’s because we know that the longer this crisis goes on the bigger the impact it will have on the global economy,” he said.
“Australia is not immune from those global economic impacts.
“In fact, Australians have been feeling those effects at the petrol pump since the crisis began.”
However, Mr Charlton said there were “still a range of issues to work through” between the United States and Iran.
“That’s why the sooner this crisis is over the quicker we can get around the resolution of some of those long standing issues, and the quicker we can get the economy back to working in a way that delivers fuel for Australians – people will feel that at the petrol pump,” he said.
“Burning the furniture to heat the house”
Analysis from UBS shows without the US releasing some of its emergency strategic reserves of oil, the disruption from the closure of the Strait of Hormuz may have pushed barrels to US$123 rather than the current price near $105.
Asian commodities expert Stephen Innes said the release of these emergency reserves only bought time before barrel prices jumped again as high prices weaken global economies.
“Markets are effectively burning the furniture to heat the house,” he said.
“The longer the world’s most important energy artery remains partially constrained, the greater the probability that this oil shock mutates from a commodity story into a broader financial crisis, feeding directly into inflation expectations, consumer strain, tighter financial conditions, and eventually recession risk.”
“That is why President Donald Trump’s increasingly urgent push for some form of accommodation with Iran and a reopening of the Strait of Hormuz has become far more than a geopolitical exercise,” Mr Innes said.
In a post to Truth Social, Mr Trump said the deal with Iran had been “largely negotiated subject to finalisation between the United States of America, the Islamic Republic of Iran, and various other countries”, including the US’ Gulf allies.
“I had a call with Prime Minister Bibi Netanyahu, of Israel, which, likewise, went very well.
“Final aspects and details of the Deal are currently being discussed and will be announced shortly … other elements of the agreement, the Strait of Hormuz will be opened”.
The closure of the strait – through which about a fifth of the world’s crude travels, much of it to Asia – sparked a surge in fuel prices and panic about future supplies, including of crude oil to refineries in Southeast Asia, as well as diesel, and fertiliser to heavily impacted countries in the developing world.
