Shares and oil dither, as investors mull Iran risks
World shares slipped and oil prices briefly hit five-month highs before retracing gains as investors awaited possible retaliation from Iran following US attacks on its nuclear sites, with fallout risks to global trade and inflation.
Markets remained restrained, with the dollar getting a modest safe-haven bid and no sign of a rush to bonds. Oil prices were up just 0.4 per cent, after rising as much as 5.7 per cent overnight.
"If you can keep your head when all about you are losing theirs, maybe you don't understand the situation," said Paul Jackson Invesco's global head of asset allocation research.
"Whether a lack of market reaction is naiveté, or a proper assessment of the situation, time will tell," he said.
European shares fell on Monday with the pan-European STOXX 600 index down 0.2 per cent.
Some market participants hoped Iran might back down, with its nuclear ambitions curtailed, or even that regime change might bring a less hostile government to power there.
"That said, any sign of Iranian retaliation or threat to the Strait of Hormuz could quickly shift sentiment and force markets to reprice geopolitical risk more aggressively," said Charu Chanana, chief investment strategist at Saxo.
The Strait of Hormuz is only about 33 km wide at its narrowest point and around a quarter of global oil trade and 20 per cent of liquefied natural gas supplies pass through it.
Analysts at JPMorgan cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Goldman Sachs warned prices could temporarily touch $US110 ($A171) a barrel should the critical waterway be closed for a month.
For now, Brent and US crude were both up 0.4 per cent at $US77.32 ($A120.45) and $US74.10 ($A115.43) a barrel, respectively. Gold also remained mostly steady at $US3365 ($A5242) an ounce.
World share markets looked moderately resilient, with S&P 500 futures and Nasdaq futures both up 0.2 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9 per cent, dragged down by shares in Taiwan which closed 1.42 per cent lower, while Chinese blue chips closed higher 0.3 per cent and Japan's Nikkei eased 0.1 per cent.
Japan's manufacturing activity data on Monday showed a return to growth in June after nearly a year of contraction, but demand conditions remain.
The dollar firmed 1.25 per cent against the yen and was last at 147.885, at its highest since May 15, while the euro dipped 0.2 per cent to $1.1497. The dollar index firmed marginally to 99.339.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising about two basis points to 4.389 per cent.
Markets are still pricing only a slim chance the Fed will cut rates at its next meeting on July 30, even after Fed Governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including Chair Jerome Powell, have been more cautious on policy, leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from Congress, which will likely cover US tariffs and the attack on Iran's nuclear sites. Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
World shares slipped and oil prices briefly hit five-month highs before retracing gains as investors awaited possible retaliation from Iran following US attacks on its nuclear sites, with fallout risks to global trade and inflation.
Markets remained restrained, with the dollar getting a modest safe-haven bid and no sign of a rush to bonds. Oil prices were up just 0.4 per cent, after rising as much as 5.7 per cent overnight.
"If you can keep your head when all about you are losing theirs, maybe you don't understand the situation," said Paul Jackson Invesco's global head of asset allocation research.
"Whether a lack of market reaction is naiveté, or a proper assessment of the situation, time will tell," he said.
European shares fell on Monday with the pan-European STOXX 600 index down 0.2 per cent.
Some market participants hoped Iran might back down, with its nuclear ambitions curtailed, or even that regime change might bring a less hostile government to power there.
"That said, any sign of Iranian retaliation or threat to the Strait of Hormuz could quickly shift sentiment and force markets to reprice geopolitical risk more aggressively," said Charu Chanana, chief investment strategist at Saxo.
The Strait of Hormuz is only about 33 km wide at its narrowest point and around a quarter of global oil trade and 20 per cent of liquefied natural gas supplies pass through it.
Analysts at JPMorgan cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Goldman Sachs warned prices could temporarily touch $US110 ($A171) a barrel should the critical waterway be closed for a month.
For now, Brent and US crude were both up 0.4 per cent at $US77.32 ($A120.45) and $US74.10 ($A115.43) a barrel, respectively. Gold also remained mostly steady at $US3365 ($A5242) an ounce.
World share markets looked moderately resilient, with S&P 500 futures and Nasdaq futures both up 0.2 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9 per cent, dragged down by shares in Taiwan which closed 1.42 per cent lower, while Chinese blue chips closed higher 0.3 per cent and Japan's Nikkei eased 0.1 per cent.
Japan's manufacturing activity data on Monday showed a return to growth in June after nearly a year of contraction, but demand conditions remain.
The dollar firmed 1.25 per cent against the yen and was last at 147.885, at its highest since May 15, while the euro dipped 0.2 per cent to $1.1497. The dollar index firmed marginally to 99.339.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising about two basis points to 4.389 per cent.
Markets are still pricing only a slim chance the Fed will cut rates at its next meeting on July 30, even after Fed Governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including Chair Jerome Powell, have been more cautious on policy, leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from Congress, which will likely cover US tariffs and the attack on Iran's nuclear sites. Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
World shares slipped and oil prices briefly hit five-month highs before retracing gains as investors awaited possible retaliation from Iran following US attacks on its nuclear sites, with fallout risks to global trade and inflation.
Markets remained restrained, with the dollar getting a modest safe-haven bid and no sign of a rush to bonds. Oil prices were up just 0.4 per cent, after rising as much as 5.7 per cent overnight.
"If you can keep your head when all about you are losing theirs, maybe you don't understand the situation," said Paul Jackson Invesco's global head of asset allocation research.
"Whether a lack of market reaction is naiveté, or a proper assessment of the situation, time will tell," he said.
European shares fell on Monday with the pan-European STOXX 600 index down 0.2 per cent.
Some market participants hoped Iran might back down, with its nuclear ambitions curtailed, or even that regime change might bring a less hostile government to power there.
"That said, any sign of Iranian retaliation or threat to the Strait of Hormuz could quickly shift sentiment and force markets to reprice geopolitical risk more aggressively," said Charu Chanana, chief investment strategist at Saxo.
The Strait of Hormuz is only about 33 km wide at its narrowest point and around a quarter of global oil trade and 20 per cent of liquefied natural gas supplies pass through it.
Analysts at JPMorgan cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Goldman Sachs warned prices could temporarily touch $US110 ($A171) a barrel should the critical waterway be closed for a month.
For now, Brent and US crude were both up 0.4 per cent at $US77.32 ($A120.45) and $US74.10 ($A115.43) a barrel, respectively. Gold also remained mostly steady at $US3365 ($A5242) an ounce.
World share markets looked moderately resilient, with S&P 500 futures and Nasdaq futures both up 0.2 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9 per cent, dragged down by shares in Taiwan which closed 1.42 per cent lower, while Chinese blue chips closed higher 0.3 per cent and Japan's Nikkei eased 0.1 per cent.
Japan's manufacturing activity data on Monday showed a return to growth in June after nearly a year of contraction, but demand conditions remain.
The dollar firmed 1.25 per cent against the yen and was last at 147.885, at its highest since May 15, while the euro dipped 0.2 per cent to $1.1497. The dollar index firmed marginally to 99.339.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising about two basis points to 4.389 per cent.
Markets are still pricing only a slim chance the Fed will cut rates at its next meeting on July 30, even after Fed Governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including Chair Jerome Powell, have been more cautious on policy, leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from Congress, which will likely cover US tariffs and the attack on Iran's nuclear sites. Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
World shares slipped and oil prices briefly hit five-month highs before retracing gains as investors awaited possible retaliation from Iran following US attacks on its nuclear sites, with fallout risks to global trade and inflation.
Markets remained restrained, with the dollar getting a modest safe-haven bid and no sign of a rush to bonds. Oil prices were up just 0.4 per cent, after rising as much as 5.7 per cent overnight.
"If you can keep your head when all about you are losing theirs, maybe you don't understand the situation," said Paul Jackson Invesco's global head of asset allocation research.
"Whether a lack of market reaction is naiveté, or a proper assessment of the situation, time will tell," he said.
European shares fell on Monday with the pan-European STOXX 600 index down 0.2 per cent.
Some market participants hoped Iran might back down, with its nuclear ambitions curtailed, or even that regime change might bring a less hostile government to power there.
"That said, any sign of Iranian retaliation or threat to the Strait of Hormuz could quickly shift sentiment and force markets to reprice geopolitical risk more aggressively," said Charu Chanana, chief investment strategist at Saxo.
The Strait of Hormuz is only about 33 km wide at its narrowest point and around a quarter of global oil trade and 20 per cent of liquefied natural gas supplies pass through it.
Analysts at JPMorgan cautioned that past episodes of regime change in the region typically resulted in oil prices spiking by as much as 76 per cent and averaging a 30 per cent rise over time.
Goldman Sachs warned prices could temporarily touch $US110 ($A171) a barrel should the critical waterway be closed for a month.
For now, Brent and US crude were both up 0.4 per cent at $US77.32 ($A120.45) and $US74.10 ($A115.43) a barrel, respectively. Gold also remained mostly steady at $US3365 ($A5242) an ounce.
World share markets looked moderately resilient, with S&P 500 futures and Nasdaq futures both up 0.2 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9 per cent, dragged down by shares in Taiwan which closed 1.42 per cent lower, while Chinese blue chips closed higher 0.3 per cent and Japan's Nikkei eased 0.1 per cent.
Japan's manufacturing activity data on Monday showed a return to growth in June after nearly a year of contraction, but demand conditions remain.
The dollar firmed 1.25 per cent against the yen and was last at 147.885, at its highest since May 15, while the euro dipped 0.2 per cent to $1.1497. The dollar index firmed marginally to 99.339.
There was also no sign of a rush to the traditional safety of Treasuries, with 10-year yields rising about two basis points to 4.389 per cent.
Markets are still pricing only a slim chance the Fed will cut rates at its next meeting on July 30, even after Fed Governor Christopher Waller broke ranks and argued for a July easing.
Most other Fed members, including Chair Jerome Powell, have been more cautious on policy, leading markets to wager a cut is far more likely in September.
At least 15 Fed officials are speaking this week, and Powell faces two days of questions from Congress, which will likely cover US tariffs and the attack on Iran's nuclear sites. Among the economic data due are figures on US core inflation and weekly jobless claims, along with early readings on June factory activity from across the globe.
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Herald Sun
an hour ago
- Herald Sun
Qatar Airways suspends all flights after Iranian strikes on US air base
Australian travellers are being warned to closely monitor their flight schedules after several planes were diverted and an airline suspended all flights amid ongoing conflict in the Middle East. Iran launched an attack on the US' Al Udied Airbase in Qatar overnight, following the US strikes on three Iranian nuclear facilities days earlier. The attack was thwarted without casualties, Qatari authorities have said. Flights for a major Middle Eastern airline have been cancelled, causing chaos for thousands of Australian travellers. Picture: Supplied Qatar Airways temporarily suspended all flights in the wake of the attack, due to the closure of air traffic movement in the State of Qatar. 'We are working closely with government stakeholders and the relevant authorities to support any passengers that have been impacted, and will resume operations when the airspace reopens,' the airline said in an online statement. 'The safety of our passengers and crew remains our highest priority.' Flights are avoiding Iran as the country launched missiles into US' Al Udied Airbase in Qatar. Picture: Flightradar The airline has since confirmed it was reinstating its flights as the airspace reopened. Additional staff have been deployed at Hamad Interational Airport and other airports to assist passengers affected by the delays and cancelled flights. 'As operations resume, we anticipate significant delays to our flight schedule,' the spokesman said. 'We would advise passengers to check or the Qatar Airways mobile application ahead of travel.' The temporary closure of the Qatari airspace forced several flights from Australia to divert to other countries. A Virgin Australia spokesman told NewsWire two flights operated by Qatar Airways had been diverted on the way to Doha. Flight VA1 (Sydney–Doha) was diverted to Bengaluru and VA15 (Brisbane–Doha) diverted to Muscat. The flight from Sydney to Doha was forced to perform a U-turn halfway through the flight, before landing in Bengaluru in India. 'Both aircraft landed safely,' they said. 'Guest recovery is being co-ordinated by Qatar Airways, including support on the ground and assistance with onward travel arrangements.' Qatas have also diverted flights amid the missile strike on US Al Udied Airbase in Qatar. Picture: NewsWire/Tertius Pickard Qantas flights have also been impacted by the closures, with one flight from Perth to London being diverted to Singapore, carrying 199 passengers and 14 crew. 'Due to airspace closures and congestion through the Middle East resulting in air traffic restrictions, QF9 (Perth-London) has been diverted to Singapore and QF33 (Perth-Paris) is returning to Perth,' the spokesman told NewsWire. 'We continue to monitor airspace availability closely and will alter our schedule as required. 'We thank our customers for their patience and understanding.' The Qantas spokesman said all passengers and crew would be provided overnight accommodation. The diverted flight will impact another flight's departure, due to a lack of aircraft on the round, with recovery being assessed. The QF33 flight from Perth to France has returned to Perth, carrying 216 passengers and 14 crew, while the QF1 flight from Singapore to London is continuing as scheduled, and is travelling north of the impacted airspace. The Qantas spokesman said the QF2 flight from Singapore to Sydney is not affected. Flight VA1 from Sydney to Doha was forced to perform a U-turn and diverted to Bengaluru in India. Picture: Flightradar Passengers scheduled to travel on Virgin Australia flights between Australia and Doha are advised to closely monitor their flight information. Doha is one of the major stopovers for Australians travelling to Europe, which is entering its summer season. One Australian who was planning to fly to Dublin on Tuesday told Today he saw 'lights coming from the distance' as missiles hit the skies. 'And at first it sort of it felt like sort of dull fireworks there, with a bit of rumblings going off,' he said. On Tuesday morning, Foreign Minister Penny Wong condemned Iran's strikes on the US bases of Qatar and Iraq, reiterating calls for 'de-escalation, dialogue and diplomacy'. 'There have been disruptions to flights with temporary airspace closures in the region,' she said. 'Closure of airspace around transit hubs may impact flights globally, causing delays and cancellations. Australians travelling should seek updates from their airlines and follow (Smartraveller). 'Australians in need of emergency consular assistance should contact the Australian Government's 24-hour Consular Emergency Centre 1300 555 135 (within Australia) and +61 2 6261 3305 (from overseas).' More to come Originally published as Qatar Airways reinstates all flights after Iranian strikes on US air base
The Advertiser
2 hours ago
- The Advertiser
'Fear most people are unaware': final push on defence precinct survey
A Newcastle Greens councillor is making a final push for a survey on Newcastle Airport's defence precinct amid the "the concerning military escalation in the Middle East". Greens councillor Charlotte McCabe secured support from fellow councillors for Newcastle council to conduct the survey, which gauges the community's knowledge and opinion of the Astra Aerolab precinct. The precinct is a 76-hectare innovation, defence and aerospace hub owned by Newcastle Airport. The airport is jointly owned by Newcastle and Port Stephens councils. Astra Aerolab will be home to defence contractor BAE Systems and Australia's first missile factory, after the federal government signed an $850 million deal with Norwegian company Kongsberg Defence Australia. Cr McCabe has been a vocal critic of the missile factory, saying she felt "lied to" in finding out it would be built on Newcastle Airport land. Cr McCabe said she felt a lot of residents weren't aware of Newcastle council's involvement with the factory or the defence precinct. She said she wanted to highlight this given the escalating situation in the Middle East, where the United States has bombed Iranian nuclear sites, Iran and Israel have traded missiles and Gaza suffers ongoing devastation. "Astra Aerolab makes community members of Newcastle and Port Stephens into business partners with Australia's defence export ambitions, particularly to US and Israel," she said. "The reality of investing in weapons is now unfolding before our eyes, yet I fear that most people are still unaware of the direct investment their councils have." Newcastle and Port Stephens councils approved the purchase of freehold land in 2018, adjacent to the airport, in order to develop a defence precinct "without consulting with their constituents", Cr McCabe said. "It's important for the community to be fully informed and appropriately consulted," she said. "I've found that most people are unaware that Newcastle council is a part-owner of the airport, let alone the fact that the council intends to profit from weapons manufacturing in order to fund council's services and infrastructure." The survey closes on June 25. A Newcastle Greens councillor is making a final push for a survey on Newcastle Airport's defence precinct amid the "the concerning military escalation in the Middle East". Greens councillor Charlotte McCabe secured support from fellow councillors for Newcastle council to conduct the survey, which gauges the community's knowledge and opinion of the Astra Aerolab precinct. The precinct is a 76-hectare innovation, defence and aerospace hub owned by Newcastle Airport. The airport is jointly owned by Newcastle and Port Stephens councils. Astra Aerolab will be home to defence contractor BAE Systems and Australia's first missile factory, after the federal government signed an $850 million deal with Norwegian company Kongsberg Defence Australia. Cr McCabe has been a vocal critic of the missile factory, saying she felt "lied to" in finding out it would be built on Newcastle Airport land. Cr McCabe said she felt a lot of residents weren't aware of Newcastle council's involvement with the factory or the defence precinct. She said she wanted to highlight this given the escalating situation in the Middle East, where the United States has bombed Iranian nuclear sites, Iran and Israel have traded missiles and Gaza suffers ongoing devastation. "Astra Aerolab makes community members of Newcastle and Port Stephens into business partners with Australia's defence export ambitions, particularly to US and Israel," she said. "The reality of investing in weapons is now unfolding before our eyes, yet I fear that most people are still unaware of the direct investment their councils have." Newcastle and Port Stephens councils approved the purchase of freehold land in 2018, adjacent to the airport, in order to develop a defence precinct "without consulting with their constituents", Cr McCabe said. "It's important for the community to be fully informed and appropriately consulted," she said. "I've found that most people are unaware that Newcastle council is a part-owner of the airport, let alone the fact that the council intends to profit from weapons manufacturing in order to fund council's services and infrastructure." The survey closes on June 25. A Newcastle Greens councillor is making a final push for a survey on Newcastle Airport's defence precinct amid the "the concerning military escalation in the Middle East". Greens councillor Charlotte McCabe secured support from fellow councillors for Newcastle council to conduct the survey, which gauges the community's knowledge and opinion of the Astra Aerolab precinct. The precinct is a 76-hectare innovation, defence and aerospace hub owned by Newcastle Airport. The airport is jointly owned by Newcastle and Port Stephens councils. Astra Aerolab will be home to defence contractor BAE Systems and Australia's first missile factory, after the federal government signed an $850 million deal with Norwegian company Kongsberg Defence Australia. Cr McCabe has been a vocal critic of the missile factory, saying she felt "lied to" in finding out it would be built on Newcastle Airport land. Cr McCabe said she felt a lot of residents weren't aware of Newcastle council's involvement with the factory or the defence precinct. She said she wanted to highlight this given the escalating situation in the Middle East, where the United States has bombed Iranian nuclear sites, Iran and Israel have traded missiles and Gaza suffers ongoing devastation. "Astra Aerolab makes community members of Newcastle and Port Stephens into business partners with Australia's defence export ambitions, particularly to US and Israel," she said. "The reality of investing in weapons is now unfolding before our eyes, yet I fear that most people are still unaware of the direct investment their councils have." Newcastle and Port Stephens councils approved the purchase of freehold land in 2018, adjacent to the airport, in order to develop a defence precinct "without consulting with their constituents", Cr McCabe said. "It's important for the community to be fully informed and appropriately consulted," she said. "I've found that most people are unaware that Newcastle council is a part-owner of the airport, let alone the fact that the council intends to profit from weapons manufacturing in order to fund council's services and infrastructure." The survey closes on June 25. A Newcastle Greens councillor is making a final push for a survey on Newcastle Airport's defence precinct amid the "the concerning military escalation in the Middle East". Greens councillor Charlotte McCabe secured support from fellow councillors for Newcastle council to conduct the survey, which gauges the community's knowledge and opinion of the Astra Aerolab precinct. The precinct is a 76-hectare innovation, defence and aerospace hub owned by Newcastle Airport. The airport is jointly owned by Newcastle and Port Stephens councils. Astra Aerolab will be home to defence contractor BAE Systems and Australia's first missile factory, after the federal government signed an $850 million deal with Norwegian company Kongsberg Defence Australia. Cr McCabe has been a vocal critic of the missile factory, saying she felt "lied to" in finding out it would be built on Newcastle Airport land. Cr McCabe said she felt a lot of residents weren't aware of Newcastle council's involvement with the factory or the defence precinct. She said she wanted to highlight this given the escalating situation in the Middle East, where the United States has bombed Iranian nuclear sites, Iran and Israel have traded missiles and Gaza suffers ongoing devastation. "Astra Aerolab makes community members of Newcastle and Port Stephens into business partners with Australia's defence export ambitions, particularly to US and Israel," she said. "The reality of investing in weapons is now unfolding before our eyes, yet I fear that most people are still unaware of the direct investment their councils have." Newcastle and Port Stephens councils approved the purchase of freehold land in 2018, adjacent to the airport, in order to develop a defence precinct "without consulting with their constituents", Cr McCabe said. "It's important for the community to be fully informed and appropriately consulted," she said. "I've found that most people are unaware that Newcastle council is a part-owner of the airport, let alone the fact that the council intends to profit from weapons manufacturing in order to fund council's services and infrastructure." The survey closes on June 25.
The Advertiser
2 hours ago
- The Advertiser
Inflation warning as conflict in Middle East escalates
Iran's response to US military strikes could lead to a surge in the price of fuel and higher inflation in Australia, economists say. Motorists have already seen a slight rise in the cost of fuel after the US launched strikes against three Iranian nuclear facilities. While Australian consumers have been told not to panic about the Middle Eastern unrest, escalating conflict in the region could lead to further price hikes, AMP chief economist Shane Oliver says. "The real risk would be if intervention by the US sets off retaliation by Iran that disrupts oil supplies," he told AAP. "If Iran do successfully block the Strait of Hormuz, then you'll end up with a bigger spike in oil prices and petrol and that will have a severe economic impact." Mr Oliver said petrol would rise by 25 cents per litre in the likely event oil prices skyrocketed to more than $100 a barrel. He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy. "If the oil price went to $100 to $150 a barrel and it's a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again," he said. "The price of airfares could go up, as well as plastic prices, which affects a lot of household goods." Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East. However, he said travellers heading through the Middle East on the way to Europe would likely face longer journeys. "The increase in congestion is causing delays," he told AAP. "With the narrowest flight path in recent memory - with Russia, Ukraine, Iran and Israel closed - the airspace is very narrow to get to Europe. "Beforehand, there were multiple ways to catch up delays and stay on times, but in reality, there is a very narrow window to catch up delays, and there is less room for error by the airlines." Mr Long said there had not been any major disruptions for Australian travellers so far and urged passengers not to cancel their flights. But on Tuesday, after Iran retaliated by carrying out a missile attack on the Al-Udeid US air base in Qatar, some flights from the capital Doha to Australia were delayed after the airspace in and out of Hamad International Airport was closed. Prime Minister Anthony Albanese has backed America's intervention in the conflict between Iran and Israel on the basis that Iran should not have access to nuclear weapons. Iran's response to US military strikes could lead to a surge in the price of fuel and higher inflation in Australia, economists say. Motorists have already seen a slight rise in the cost of fuel after the US launched strikes against three Iranian nuclear facilities. While Australian consumers have been told not to panic about the Middle Eastern unrest, escalating conflict in the region could lead to further price hikes, AMP chief economist Shane Oliver says. "The real risk would be if intervention by the US sets off retaliation by Iran that disrupts oil supplies," he told AAP. "If Iran do successfully block the Strait of Hormuz, then you'll end up with a bigger spike in oil prices and petrol and that will have a severe economic impact." Mr Oliver said petrol would rise by 25 cents per litre in the likely event oil prices skyrocketed to more than $100 a barrel. He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy. "If the oil price went to $100 to $150 a barrel and it's a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again," he said. "The price of airfares could go up, as well as plastic prices, which affects a lot of household goods." Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East. However, he said travellers heading through the Middle East on the way to Europe would likely face longer journeys. "The increase in congestion is causing delays," he told AAP. "With the narrowest flight path in recent memory - with Russia, Ukraine, Iran and Israel closed - the airspace is very narrow to get to Europe. "Beforehand, there were multiple ways to catch up delays and stay on times, but in reality, there is a very narrow window to catch up delays, and there is less room for error by the airlines." Mr Long said there had not been any major disruptions for Australian travellers so far and urged passengers not to cancel their flights. But on Tuesday, after Iran retaliated by carrying out a missile attack on the Al-Udeid US air base in Qatar, some flights from the capital Doha to Australia were delayed after the airspace in and out of Hamad International Airport was closed. Prime Minister Anthony Albanese has backed America's intervention in the conflict between Iran and Israel on the basis that Iran should not have access to nuclear weapons. Iran's response to US military strikes could lead to a surge in the price of fuel and higher inflation in Australia, economists say. Motorists have already seen a slight rise in the cost of fuel after the US launched strikes against three Iranian nuclear facilities. While Australian consumers have been told not to panic about the Middle Eastern unrest, escalating conflict in the region could lead to further price hikes, AMP chief economist Shane Oliver says. "The real risk would be if intervention by the US sets off retaliation by Iran that disrupts oil supplies," he told AAP. "If Iran do successfully block the Strait of Hormuz, then you'll end up with a bigger spike in oil prices and petrol and that will have a severe economic impact." Mr Oliver said petrol would rise by 25 cents per litre in the likely event oil prices skyrocketed to more than $100 a barrel. He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy. "If the oil price went to $100 to $150 a barrel and it's a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again," he said. "The price of airfares could go up, as well as plastic prices, which affects a lot of household goods." Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East. However, he said travellers heading through the Middle East on the way to Europe would likely face longer journeys. "The increase in congestion is causing delays," he told AAP. "With the narrowest flight path in recent memory - with Russia, Ukraine, Iran and Israel closed - the airspace is very narrow to get to Europe. "Beforehand, there were multiple ways to catch up delays and stay on times, but in reality, there is a very narrow window to catch up delays, and there is less room for error by the airlines." Mr Long said there had not been any major disruptions for Australian travellers so far and urged passengers not to cancel their flights. But on Tuesday, after Iran retaliated by carrying out a missile attack on the Al-Udeid US air base in Qatar, some flights from the capital Doha to Australia were delayed after the airspace in and out of Hamad International Airport was closed. Prime Minister Anthony Albanese has backed America's intervention in the conflict between Iran and Israel on the basis that Iran should not have access to nuclear weapons. Iran's response to US military strikes could lead to a surge in the price of fuel and higher inflation in Australia, economists say. Motorists have already seen a slight rise in the cost of fuel after the US launched strikes against three Iranian nuclear facilities. While Australian consumers have been told not to panic about the Middle Eastern unrest, escalating conflict in the region could lead to further price hikes, AMP chief economist Shane Oliver says. "The real risk would be if intervention by the US sets off retaliation by Iran that disrupts oil supplies," he told AAP. "If Iran do successfully block the Strait of Hormuz, then you'll end up with a bigger spike in oil prices and petrol and that will have a severe economic impact." Mr Oliver said petrol would rise by 25 cents per litre in the likely event oil prices skyrocketed to more than $100 a barrel. He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy. "If the oil price went to $100 to $150 a barrel and it's a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again," he said. "The price of airfares could go up, as well as plastic prices, which affects a lot of household goods." Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East. However, he said travellers heading through the Middle East on the way to Europe would likely face longer journeys. "The increase in congestion is causing delays," he told AAP. "With the narrowest flight path in recent memory - with Russia, Ukraine, Iran and Israel closed - the airspace is very narrow to get to Europe. "Beforehand, there were multiple ways to catch up delays and stay on times, but in reality, there is a very narrow window to catch up delays, and there is less room for error by the airlines." Mr Long said there had not been any major disruptions for Australian travellers so far and urged passengers not to cancel their flights. But on Tuesday, after Iran retaliated by carrying out a missile attack on the Al-Udeid US air base in Qatar, some flights from the capital Doha to Australia were delayed after the airspace in and out of Hamad International Airport was closed. Prime Minister Anthony Albanese has backed America's intervention in the conflict between Iran and Israel on the basis that Iran should not have access to nuclear weapons.
