17 Jun Here we go again! – the threat from the Israel/Iran war
Key Points
- So far, the Israel/Iran war is limited, and various constraints suggest it may stay that way with Iran reportedly wanting to return to talks. It’s still early days though and so the risk of an escalation threatening oil supplies remains significant.
- Current oil prices could boost Australian petrol prices by around 10 to 12 cents a litre, but if oil supply is not disrupted, oil and petrol prices will settle down.
- While higher oil prices could add to inflation, it’s more likely to be deflationary as it will act as a “tax on spending”. So central banks, including the RBA, should look through it.
