The escalating conflict in Iran and neighbouring countries is a significant risk to Australian households. Around one fifth of the world’s oil and gas flows through the Strait of Hormuz. Markets are already reacting and fuel prices are rising here. When fossil fuel supply is threatened, prices spike and Australians pay.

This is Australia’s core energy vulnerability: Australia is still deeply exposed to volatile global fossil fuel markets. As long as its power system and transport rely on coal, oil and gas, overseas conflicts will cause price shocks.

This paper proposes that the only durable protection is to reduce dependence by accelerating renewable energy and the electrification of homes, businesses and transport. This delivers lasting cost-of-living protection and energy security, while cutting climate pollution.

Key findings

1. Dependence on oil and gas is a risk to Australia's climate, energy security and cost-of-living.
2. Australians have already paid a high price for overseas fossil fuel shocks. 
3. Australia is still highly exposed to global fossil fuel price spikes.
4. Clean energy and electrification are already cutting bills and shielding households from price shocks. 
5. To protect households, governments should accelerate the roll out of renewable energy, storage and electrification.