As Trump remains opaque about the duration of the war in Iran, Australians are starting to feel the consequences of global unrest on their already strained pay cheques.

While Trump sends mixed messages about the conflict, declaring it “won” in one breath, and then saying it could end “soon”, or might need to go “further” in another, global markets and the world economy are shrouded in uncertainty.

According to forecasters, a prolonged conflict could resemble past global economic crises, with the chief economist in the UK at accountancy firm Deloitte warning, “Surging oil and gas prices are harbingers of economic trouble. Higher energy prices, triggered by war or revolution in the Middle East, were important factors in Western recessions in 1973, 1979 and 1990.”

In Australia, depending on the timelines of the war, this pressure could play out in several ways, including:

Scenario 1: Short disruption (0–3 months)

Petrol prices continue to rise, with people resorting to public transport and reducing non-essential travel by staying local.

Higher grocery bills as transport costs rise, with occasional gaps in access to certain goods (especially those that are imported).

Air travel becomes more expensive, with some routes reduced/changed. Slower delivery times on packages and rising shipping costs.

Overall, frustrating, expensive, and added pressure when we least need it – but weatherable.

Scenario 2: Prolonged disruption (3–6 months)

Noticeable shortages in fresh produce (transport-sensitive) and imported goods, with prices starting to rise significantly. A potential push towards more local produce.

Increased pressure on public transport as fuel costs stay high, fewer cars on the roads. WFH supported by the government to stem the use of cars.  Airfares spike, and international travel becomes a luxury again.

Freight and supply chains are affected by rising diesel costs and scarcity, leading to slowing of construction and import/export.

Fuel prioritised for hospitals, emergency services, and agriculture. Government intervention becomes visible.

Notable lifestyle adjustments have to be made, with the community forced to actively change habits.

Scenario 3: Severe disruption (6+ months)

Regular shortages of fresh food, imported items, with panic buying cycles like the toilet paper stockups during the pandemic. Possible rationing discussion and limits of key items.

Petrol stations running out of supply and rationing introduced (which hasn’t happened in Australia since 1979) as governments look at priority access for essential workers.

Regional areas become more isolated, as they are the hardest hit. Conditions start to mirror early 2020 lockdown behaviour, with social tension increasing.

In an interview with The Guardian, National Farmers’ Federation president Hamish McIntyre said food prices could “get very serious” for customers over the next month due to the surging cost of production.

“It’s really going to drive inflation in Australia, and interest rates, which hurts everyone in Australia, including farmers,” says McIntyre.

In another article, the CEO of dairy farmer cooperative Norco, Michael Hampson, says a six- to 12-month disruption to food supply is likely a best-case scenario, but if the Strait of Hormuz doesn’t reopen soon, the oncoming crisis will make COVID look like a “tea party”.

“If it isn’t resolved promptly, as in the next week or two, the fallout for this event is going to make Covid look like a tea party,” Hampson said. “We won’t be worried about running out of toilet paper – we’ll be worried about not having food.”

So while many may argue that we are particularly vulnerable to this emergency post-pandemic and the flow-on effects (cost-of-living crisis, housing shortages). However, it’s a little more complicated than that.

While Australia is still poorly positioned to prevent fuel shortages from turning into a wider disruption, we are better positioned than early 2020 to absorb the shock. The biggest post-COVID improvement is on the demand-management and coordination side; while our biggest weakness is that the country still depends heavily on imported refined fuel and relatively thin inventories.

The clearest way to put it is this: post-pandemic Australia is socially and administratively more adaptable, but materially still vulnerable. On the material side, official and ministerial reporting still points to roughly:

• 38 days of usual consumption of petrol

• 30 days of diesel

• 30 days of jet fuel

As it stands, Australia continues to import about 90% of its fuel. That means the system can handle a short disruption much better than a long one, especially if diesel tightens.

On the stronger side since 2020, importers and refiners have been subject to a minimum stockholding obligation since 2023, which gives the government a reserve mechanism to release into the market in an emergency, which it has.

We are also better positioned to move to remote and hybrid work if need be, with ABS data showing that 36% of employed people usually worked from home in August 2025, not far below the 2021 pandemic peak of 40%. That matters because one of the fastest ways to ease a fuel shock is simply to cut commuting demand without shutting down a large share of the economy.

There is also a stronger institutional awareness of supply-chain fragility, post the onset of the pandemic. The Office of Supply Chain Resilience was created, and governments refreshed the National Freight and Supply Chain Strategy in 2025. That strategy explicitly treats reliable access to vital goods and resilient freight networks as a national priority.

However, the biggest post-pandemic weakness is that Australia is entering this period with less room on household budgets than it had earlier in the recovery. The latest ABS CPI showed inflation at 3.7% in the year to February 2026, still above the RBA’s 2–3% target band. So a fuel shock now lands on top of an already stretched cost-of-living environment, making the flow-on effects to food, freight and services more likely to be felt quickly.

So while post-pandemic Australia has become better at coping with disruption, we have not yet built enough national capacity to be genuinely insulated from it.

So, in practical terms, Australia’s post-COVID position looks like this:

Better able to manage the shock

• proven capacity for remote work and flexible operations
• stronger crisis coordination across governments
• formal stockholding and emergency-release mechanisms
• much higher awareness of supply-chain risk than in 2020.

Still exposed to serious flow-on effects

• heavy import dependence for refined fuel
• thin stock cover by international standards
• inflation already elevated before the latest oil shock
• diesel disruption can hit food, freight, ports and regional economies fast.

This change also comes at a time globally where, in the words of the 2026 Elderman Trust Barometer, there is a “retreat into insularity”.

What the report shows is that in 2026, there is a worldwide decline in trust in government leaders, news organisations, and foreign businesses.

It also highlighted the disparity between low-income and high-income earners when it comes to trust in business, government, media, and NGOs – with Australia sitting at 63% trust for high-income earners, and 44% distrust for low-income earners – a number sure to balloon in light of the current climate.

In the short term, Australia can hope for a swift end to the war, with the country likely to muddle through with higher prices, some local shortages and more remote work. For a prolonged shock, the flow-on effects would probably show up first in diesel-dependent sectors: freight, supermarkets, regional supply, construction and agriculture – having a catastrophic flow-on effect for small businesses and the general public.