The high costs of Albo’s rubber-stamp war in the Middle-East

As the “Iran war” fuels Israel’s desire to create chaos in the Middle East, Australia finds itself in a strategic quagmire of complex priorities and rising energy costs. Stuart McCarthy reports.

by 2023 Defense Strategic ReviewAustralia faces “the worst strategic conditions since the Second World War”. The need to “turn” from senseless “endless wars” in the Middle East to the Indo-Pacific and counter the rapid accumulation of China’s military power warrants an overhaul of our clearly “unfit for purpose” defense force, spending up to $368 billion on AUKUS submarines and a plan to enter the “missile age”.

This “strategic” document makes no mention of this country’s most serious vulnerability. That is, our systemic exposure to global oil shocks of the kind triggered by the latest military debacle in the Middle East.

Our failure to prepare for these shocks is the result of at least two decades of inexcusable incompetence across the political spectrum.

Decrease in reserves. Fuel security politics hides the truth

The reality we face is that Australia is caught with its trousers down during a seismic but predictable shift in the global geopolitical landscape. The repercussions of the current Middle East war will affect us deeply, and we are not prepared for it.

Even if the vital Strait of Hormuz, which supplies 20 percent of global oil supply, miraculously reopens to commercial ships in the next few weeks, economic recession is already a safe bet. The 1979 oil shock caused a severe recession in industrialized countries. Australia experienced a double-dip recession and unemployment rose above 10%.

oil addiction

Australia currently produces less oil than in 1979, but demand has doubled over the same period in line with economic growth. We are now 90 percent dependent on imported petroleum fuel.

The 20 years it took to transform our road transport fleet have been wasted, and we are at the tail end of a jet fuel-dependent global air transport system. The demand-driven Covid recession saw a 7% decline in domestic petroleum fuel consumption, mostly as a result of the near-total shutdown of the aviation sector, but we now face a collapse in the availability of globally traded petroleum fuels, affecting the entire transport sector.

And there’s more. Up to two-thirds of the Urea fertilizer used by Australian farmers is generally income Strait of Hormuz. There are already shortages of some essential medicines and other manufactured goods that rely on fragile, just-in-time global supply chains.

The stability of our financial system continues to depend on the assumption of continued economic growth, as it did before the 2008 financial crisis. Oil supply and similar economic shocks are blithely dismissed as “externalities” in ordinary financial and economic models. It is certain that much of the financial capital we need to properly transform our economy into a dominant resilience model will evaporate in stocks and financial markets.

This shock will undoubtedly be much worse than what we saw in 1979.

So who will pay the price? In short, we will all do it.

cost of war

Since the end of the Second World War, the human costs of wars in Australia have been borne only by a very small proportion of our community serving in the defense forces, their families and the people of countries “over there”.

For most of us, the evening news or social media feeds are mere curiosity.

In military circles, Australia’s contributions to US-led wars in the Middle East and elsewhere have often been downplayed. niche wars. US-led military coalitions were allocated relatively small units with “niche” capabilities that would have little impact on overall strategic outcomes other than legitimizing US hegemony and minimized domestic political risk and accountability should things go wrong.

Given that this government has reflexively committed us to this war with less foresight than previous governments in the last few wars, it would be more accurately described as Albanese’s rubber stamp war.

A few hours after Israel and the United States launched their first airstrike on Iran on February 28, Albanese restated Israel’s excuse that Iran posed an imminent nuclear threat. This excuse has already been publicly debunked by the US Director of National Intelligence.

The US Director of National Intelligence debunked the lie that Iran poses an imminent nuclear threat (confirmed by Albanese, Marles & Wong on February 28). As in Iraq in 2003, the Australian government has committed us to a war based on lies.https://t.co/vEoixIF5Xm

— Stuart McCarthy (@StuartMcCarthy_) March 18, 2026

Weeks before the Iran war, US debt exceeds 39 trillion dollars

Unprovoked attacks

The attacks, the second in less than a year, came as U.S. officials were negotiating with the Khamenei regime over its uranium enrichment program. It would be illogical for Iran to return to the negotiating table because this is now a proven indicator of the next Israeli-US aerial bombardment campaign.

The degree of Israeli-US incompetence on display here is breathtaking.

even before any moral or legal consideration is made.

Now facing a direct existential threat, the Khamenei regime responded with a consistent strategy of horizontal escalation that it had been preparing since at least 2003.

From their perspective, all they have to do to “win” this war is survive.

Their strategy is to inflict serious economic pain on the global economy by closing the Strait of Hormuz until the US comes to its senses and to drive a wedge between the US and the Gulf countries, which host permanent US military bases that project power to the region.

These bases have become a source of growing tension in the Middle East since the Iranian revolution in 1979 and Russia’s invasion of Afghanistan later that year. At the time, the United States viewed the Russian presence in Afghanistan as a threat to its vital national interest in maintaining access to Middle Eastern oil exports and responded with a permanent military presence in the Gulf countries under the “Carter doctrine.”

Over time, this support from the USA also enabled the Gulf countries and Israel to control the threat that the Iranian regime perceived to posed to regional stability.

Now, nearly five decades later and with the NATO-led wars in Afghanistan and Iraq in the rearview mirror, U.S. bases nevertheless persist as part of an increasingly escalating spiral with Iran.

Iran will not be content with Israel and the USA stopping their attacks. They are now demanding the permanent closure of US bases in the Gulf. Despite their serious diplomatic efforts to establish stable relations with Iran, the Gulf countries are stuck in the middle of a war they do not want and there is no clear way out.

Has the war gotten out of control?

Wednesday night Israel bombed South ParsThe world’s largest gas field, jointly owned by Qatar and Iran. Iranian officials have vowed to launch retaliatory attacks on gas and oil infrastructure elsewhere in the region. This marks the next step on the escalation ladder and means that the duration of the energy and economic shock will be measured in years, not months.

Trump no longer has control of the situation, even if he had it. For many years, Netanyahu has envisioned not just regime change but the disintegration of the Iranian state as a strategic gain for Israel, and he, not Trump, calls the shots.

For Australia, our small contribution with the air force’s Wedgetail surveillance aircraft, ostensibly to help protect the United Arab Emirates from incoming Iranian missiles, actually played into Iran’s strategic narrative.

Despite Foreign Minister Penny Wong’s nauseating semantics that this aircraft plays a “defensive” role,

Australia is now party to the war with Iran.

From our own base at Al Minhad in the UAE, which has been targeted at least twice by the Iranians. We are one of the few Western countries with a permanent military presence in the Gulf, and this presence in itself helps fuel the escalating spiral.

While all this is happening “over there,” for the first time in almost a century, some of the human cost of this war will be borne by the people right here at home. Mortgage payments and rents will continue to rise, as will the costs of fuel, food, and utilities. Savings and investments will take a hit. Many people will lose their jobs. Some will lose their homes.

Among them are the “Australian warriors” – those who were considered key constituents of the Labor Party before the “labor party” abandoned its principles in favor of banal neoliberal economic rationalism, political careerism and mindless identity politics – the “Australian warriors” who worked hard but struggled to make ends meet.

We can hope that this shock will eventually lead to a consensus on a rational, sovereign, independent national security and foreign policy. Our policies of vassal state obedience to the United States, and in this case Israel, are beyond expedient. They directly undermine our vital national interests. In the meantime, we are embarking on a difficult journey.

International Relations and Iran ft Scott Burchill – MWM Live