The war in Iran has once again exposed how vulnerable the world’s energy markets are to geopolitical disruption. In wild swings, benchmark crude oil prices spiked as high as US$120 per barrel, roughly 50% higher than before the conflict, before sliding below $100.
Energy price surges hit households quickly. Higher petrol prices raise transport costs and push up everyday prices. This is the second major energy price spike in the past five years due to war.
The federal government faces a familiar question: what policy tools should it use to respond to sudden global oil price shocks and rising living costs?
