The establishment of a peace and ceasefire framework between the United States and Iran following recent hostilities would be a welcome sign in Australia. Canberra had been apprehensive about the war, both due to the domestic impacts of high fuel prices, and deep concern for the unintended consequences that may have been created by the fighting.
To understand more about the implications going forward I spoke to Jane Hardy, Australia’s former ambassador to Spain and former assistant secretary for arms control and counterproliferation within the Department of Foreign Affairs and Trade. She is currently a non-resident senior fellow at the Australian Strategic Policy Institute (ASPI).
For both the Australian government and, critically, the U.S government, the flow of oil remains a paramount consideration. Hardy said that “there’s a huge amount of political pressure to make sure that it is flowing and that the price of oil stays at a reasonable state.”
Yet after such a disruption, this is easier said than done. Hardy highlighted that “there are a whole lot of ships apparently waiting to get into the Strait [of Hormuz]. So it’s going to take a while to really settle into a routine.” She added that “it will probably take six months to settle into a proper release of oil flows out of the strait, and much longer for liquefied natural gas due to Iran’s damage to Qatar’s LNG facilities.”
For most of the world – Canberra included – the war looked unnecessary, like another U.S. adventure in the Middle East that had no essential motivation and no clear sense of purpose. Alongside this, a constant shifting of the reasoning for the war and U.S. President Donald Trump’s “injudicious comments” has undermined Washington’s credibility. As Hardy pointed out, this has a “profound effect” on sensitive issues like fuel supply, and involved the fate of domestic economies, global shipping, and banking.
Yet it may be the wider implications for Indo-Pacific security where Australia sees the impacts of the Iran war being most consequential. The negotiations currently ongoing in Switzerland will have a central focus on Iran’s nuclear program, including uranium enrichment limits and the return of U.N. nuclear inspectors, as Washington pushes to prevent Tehran from developing nuclear weapons.
Beijing will be closely watching these negotiations as China has a significant stake in the global nuclear non-proliferation regime. Hardy informed me that the strategic global balance would be altered over the next decade, “because China will probably reach the likes of well over a thousand nuclear warheads. And that puts it in the same league as the two previous leaders, Russia and the U.S.”
Hardy further explained that “in addition, [China] has a nuclear triad. That means a system for delivering nuclear weapons, which involves land, sea and air.”
The implications of China’s nuclear expansion runs the risk of its neighbors in Japan and South Korea feeling the need to develop a nuclear weapons capability of their own. Therefore, in regards to the Iran negotiations, Hardy said “how proliferation is controlled and what is allowed for a non-nuclear weapon country is something China is deeply concerned about.”
This has significant consequences for Australia’s interests in Northeast Asia, given that three of its four largest trading partners are in the region. Any instability there is a threat to the “way of life” that Australia’s recent National Defense Strategy conceptualizes as central to the country’s security.
Yet how traditional security is understood in the modern environment has also been revealed during the Iran war. As Hardy highlighted, Iran “doesn’t need the bomb. It’s got the Strait of Hormuz.”
The country has been able to inflict a high degree of economic and political costs, just as impactful as physical destruction. In conjunction with how Ukraine has been able to resist Russian aggression primarily through the use of drones, Hardy stated that “the whole strategic balance is changing because of these other methods of conducting war with fairly cheap assets.”
This has implications for Australia, but as Hardy explained, “Geography remains incredibly important in all this.” Any potential threat to Australia “would come from a long way away,” meaning that the maritime theater will continue to be central to how Australia understands its own defense.
The key lesson from the Iran war is that conflicts are now rarely confined to their specific locations. The nature of globalized trade routes means that critical commodities are under severe threat from disruption, and this can create heavy economic and political costs. Emerging technologies also can profoundly shape outcomes in unexpected ways. Australia’s geography may provide it with some insulation from conflict, but its maritime dependency creates other vulnerabilities.
