Energy instability is already hitting the Australian economy where it hurts: the supply chain
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast site, my own website, the Apple podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at https://www.businessacumen.biz/.
I am Leon Gettler. My job is review and monitor the week’s news in business finance and economics. I bring it all to you every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 8 in our series for 2026 and today’s date is Friday March 27
First, I’ll be talking to Professor David Ubilava about the impact of the Middle East conflict on fuel and supply chains, Australian agriculture and production and the flow on effect to food and grocery prices.
And I’ll be talking to Rabobank economist and China expert Teeuwe Mevissen on the summit between Xi Jinping and Donald Trump which has been delayed because of the war with Iran. Donald Trump would have other things on his mind to make Beijing less of a priority for now. And it gives Xi Jinping time out to plan ahead.
But first, let’s talk to David Ubilava
So what’s happening in the news?
The game has completely changed in the Persian Gulf. For years, the ‘nightmare scenario’ everyone talked about was Iran closing the Strait of Hormuz. But what we’re seeing now is actually much more disturbing. We’ve moved past simple transit delays and into a phase of direct attacks on the region’s energy backbone. We’re talking about long-term, multi-million dollar damage to facilities that provide a massive chunk of the world’s natural gas. This past Wednesday, Iran launched a retaliatory missile strike on Ras Laffan, Qatar’s massive energy complex. To give you an idea of the scale, that single site produces about a fifth of the world’s liquefied natural gas (LNG). This follows an Israeli attack on Iran’s South Pars field. And while workers are still picking through the rubble, the initial word from Qatar’s energy minister is sobering: it could take up to five years to fully repair the damage, cutting their export capacity by 17%. As energy expert David Goldwyn put it, we’ve shifted from ‘stopping transit,’ which is temporary, to ‘attacking infrastructure,’ which has effects that last for years. Right now, most facilities are still intact, but as Jason Bordoff from Columbia University warns, the situation is on a knife’s edge. If these precision strikes continue, we aren’t just looking at a few weeks of disruption—we’re looking at a fundamental shift in the global economy’s trajectory. If you think your wallet is feeling the pinch now, some analysts are warning that the worst is yet to come. Jason Miller from Michigan State University calls this the largest disruption of crude oil and refined products in history. Before this war, oil was sitting around $73 a barrel. Now? Analysts at Wood Mackenzie say $200 a barrel is a real possibility for 2026. At that price, a global recession isn’t just a risk—it’s an inevitability. Remember, petroleum is in everything. When diesel and jet fuel prices spike, the cost of every avocado, smartphone, and pair of sneakers follows suit. Meanwhile, there is a bizarre ‘he-said, she-said’ playing out on the diplomatic stage. President Trump told reporters recently that the U.S. is in ‘very productive’ talks with a man he calls the ‘most respected leader’ in Iran—presumably referring to the new Supreme Leader, Mojtaba Khamenei. Trump even ordered a five-day pause on strikes to give those talks room to breathe.
But the view from Tehran is completely different. Iran’s Parliament Speaker, Mohammad Bagher Ghalibaf, is flatly denying that any negotiations have happened. He called Trump’s claims are ‘fake news’ designed to manipulate the oil markets and help the U.S. escape what he called a ‘quagmire.’ Whether it’s real diplomacy or market theatre, the uncertainty is keeping the global economy in a state of high-voltage anxiety.
We also start today with a sobering reality check on the global energy market. The head of the International Energy Agency, Fatih Birol, has issued a blunt warning from Canberra, questioning whether world governments truly grasp the magnitude of what he’s calling the worst oil crisis in history. With the Strait of Hormuz currently blocked and President Trump threatening to destroy Iranian energy infrastructure if it doesn’t reopen, the Asia-Pacific region is right in the firing line. Australia is particularly vulnerable, relying on imports for 90% of its fuel. Prime Minister Anthony Albanese is shifting Australia’s trade stance to a two-way street philosophy. He’s been in talks with Singapore, South Korea, and Japan, essentially sending a clear message: if you want our LNG and coal to keep your lights on, we need you to keep the fuel tankers moving to our shores. It’s a high-stakes game of energy diplomacy. While Energy Minister Chris Bowen says the government is prudently planning for contingencies—including the possibility of petrol rationing—the IEA is suggesting even more radical shifts, like mandatory work-from-home orders and number plate rotations to limit driving. The PM’s take? The era of ever-expanding free trade is officially over, and we need to be over-prepared for a very long economic tail.
That energy instability is already hitting the Australian economy where it hurts: the supply chain. We’re seeing what some industry leaders are calling a Covid 2.0 hit to the system. Logistics giant DHL has already moved to weekly fuel surcharge reviews because diesel prices spiked up to 50% in just the second week of the Middle East conflict. This isn’t just about the bowser, though. Small-to-medium transport operators are hiking fuel levies from 15% to over 27% just to stay afloat. The ripple effect is everywhere. Manufacturers are reporting that the cost of raw materials—like the resins used in plastics—has jumped 40%. We’re seeing price hikes in everything from wire and cables to food packaging. Treasurer Jim Chalmers is now warning that this conflict could push inflation back above 5% and keep petrol prices elevated for the next three years. The structural weakness here is clear: while Australia is an energy-exporting powerhouse in gas and coal, we have almost no domestic buffer for oil. Analysts are warning that if tensions in the Gulf escalate further, the supply outlook for Australia will deteriorate rapidly, leaving households and businesses to face an economy-wide price shock that could last the rest of the decade.
On the diplomatic front, the government is trying to use our energy exports as leverage to keep the lights on. Energy Minister Chris Bowen revealed that six fuel tankers destined for Australia were cancelled or deferred for next month. Since we import 90% of our oil, Canberra is leaning on our regional partners, essentially reminding them that we supply 40% of Japan’s LNG and massive amounts of coal to South Korea and Malaysia. We are also seeing a record surge of fuel being shipped from the US—the most in 30 years—but that journey takes twice as long as the usual route from Asia. Despite some petrol stations running dry, the government says it isn’t ready to invoke emergency rationing powers just yet, but they are keeping the 1984 Liquid Fuel Emergency Act on the table.
After nearly a decade of negotiations, Australia and Europe have finally signed a massive free-trade deal that the government says will pump $10 billion a year into our economy. Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen made it official at Parliament House, calling it a win-win for both sides. On the winning side of the ledger, we’re seeing tariffs disappear on wine, seafood, and horticulture. Plus, in a huge win for local branding, Aussie producers can keep using names like Prosecco, Parmesan, and Kransky locally. We are actually the only country outside of Italy that the EU is allowing to keep the Prosecco name for domestic sales. In exchange, we’re axing the 5% tariff on European goods and overhauling the luxury car tax. There is now a $120,000 threshold for zero-emissions vehicles, which is a major win for European EV manufacturers. But it isn’t all celebrations. The Australian red meat industry is actually pretty furious. While our beef quota is jumping from about 3,000 tonnes up to 35,000 tonnes, industry leaders are calling the outcome “bewildering.” They’re arguing that we’ve been let down and that the deal doesn’t offer the same level of fairness that other trading partners have secured. So, why the rush to sign now? A lot of it comes down to global stability. With the volatility of U.S. trade policy and those “liberation day” tariffs, Canberra and Brussels decided it was time to lean on their “trusted friends.” Beyond the trade of goods, this deal also links us to a $158 billion research program and a new defense agreement. It’s a massive strategic shift that proves Australia is looking toward Europe for long-term reliability.
In the tech space, the Albanese government is moving to curb the “data centre gold rush.” A new national interest framework will expect AI giants to fund their own renewable power if they want fast-tracked approvals. This follows global concerns about data centres cannibalising the energy transition. Industry Minister Tim Ayres says the goal is to ensure these energy-intensive projects don’t drive up consumer prices or drain drinking water supplies. Interestingly, this aligns with Donald Trump’s State of the Union demand that data centre developers build their own power plants. Companies like Anthropic are already signaling they are willing to pay for grid upgrades to keep the AI boom moving.
The Albanese government is staring down a massive fiscal challenge as we approach the May 12 budget. The target? The National Disability Insurance Scheme—or NDIS—which has ballooned into a $52 billion program.”New Treasury research has highlighted a ‘productivity malaise’ linked directly to the care sector. While the jobless rate looks good at 4.3%, Treasury says the doubling of workers in government-backed care roles—now 16% of our workforce—is actually weighing on the economy. Why? Because productivity in these non-market sectors has been falling by about 1% a year. Treasurer Jim Chalmers is calling this a ‘tough decision’ moment. Inflation is threatening to hit 5%, fuel prices are soaring, and we’re looking at a decade of deficits. Economists like Stephen Walters are calling this a ‘break glass’ moment, suggesting the government needs to find $130 billion in savings over four years. Specifically, NDIS Ministers Mark Butler and Jenny McAllister have been told to hack the scheme’s growth rate in half—down to around 5% or 6%. The numbers are staggering. NDIS payments for participants with autism alone have blown out to over $10 billion a year. Another $11 billion is going toward social and community support, which experts say has had very little oversight. The government’s message is clear: if we don’t fix productivity and rein in spending now, the only other levers left are tax hikes or deeper service cuts. It’s a massive political tightrope with the next election still two years away.
While one arm of the government tries to cut costs, the other is trying to manage a ‘gold rush.’ I’m talking about the massive boom in AI data centres and the enormous strain they’re putting on our power grid. Industry Minister Tim Ayres and Assistant Minister Andrew Charlton have just unveiled a new ‘National Interest Framework.’ Essentially, the government is telling AI giants: ‘If you want fast-tracked approvals to build here, you need to bring your own power to the party.’ They’re expecting these data centres to fund their own renewable energy projects so they don’t cannibalize the energy transition or drive up electricity prices for the rest of us.” Right now, data centres use about 2% of our grid power—much less than mining or manufacturing—but the growth trajectory is vertical. We’re already seeing global players like Anthropic committing to pay for new power generation and grid upgrades just to get a foothold here. In the US, companies like Microsoft and Google are even looking at reactivating old nuclear plants to keep up. It’s not just about electricity; it’s about water and jobs too. The government wants these centres to use recycled water and provide ‘privileged access’ to local startups and researchers. As Victor Dominello put it, we don’t have the luxury of ‘glacial government’ anymore. The world is moving too fast. The goal here is to make sure the AI boom builds Australia’s infrastructure rather than just draining our resources for offshore gain.
The corporate watchdog is cracking down on unregulated financial advice, and this time, AI platforms are in the crosshairs. New research from ASIC shows that AI has become a go-to source for Gen Z, with nearly 20% of 18-to-28-year-olds using these platforms for financial guidance. Even more striking? Over 60% of them actually trust the info they get. ASIC Commissioner Alan Kirkland isn’t pulling any punches. He warned that if an AI tool makes specific product recommendations based on your personal circumstances, that is legal financial advice—and in Australia, you need a license for that. But it’s not just AI. Social media remains a minefield. While 63% of Gen Z use it for tips, ASIC points out these posts are often designed for engagement, not accuracy. We’re seeing a massive rise in “superannuation switching” scams and high-risk crypto schemes being pushed by influencers. In fact, Gen Z is now twice as likely to own crypto than any other generation, often trading based on nothing more than a trending post. Kirkland’s advice is simple: be careful. Between AI hallucinations and social media scammers, the line between “helpful tip” and “financial disaster” has never been thinner.
Finally, the disgraced media executive Antony Catalano is being iced out by his own company. Australian Community Media has issued a scathing disclaimer, stating that while Catalano may have a 50% shareholding, he is “not a custodian of its culture and never will be.” This follows his arrest for alleged assault and making threats to kill. ACM is Australia’s largest regional publisher, and the company is clearly trying to protect its reputation and its 400 journalists. There is reportedly deep concern within the organization about a backlash from advertisers, with senior figures putting pressure on Catalano to cut ties with the business completely.
And that’s it for this week.
And next week, I’ll be talking to people2people’s managing director Catherine Kennedy about how entry-level jobs could be the first quiet casualty of workplace AI adoption, with 45% of employers expecting to hire fewer junior roles within three to five years.
And I’ll be talking to AMP Capital chief economist Shane Oliver about the RBA’s decision to hike rates.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
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