Australia’s political and military leaders are warning of dangerous global conditions as violence in the Middle East escalates.
Hundreds of people, including civilians, have been killed in the days since Israel launched a surprise assault on Iranian nuclear and military sites.
The two nations have since exchanged air and missile strikes, with Iran vowing to “open the gates of hell” against its sworn enemy.
As analysts watch the unfolding violence with concern, leaders are also flagging shocks to the global economy.
Treasurer Jim Chalmers said there had already been substantial economic consequences, pointing to a spike in the cost of oil.
“This is a perilous moment for the Middle East, and it’s a perilous moment for the global economy as well,” he told ABC News.
“Now this obviously poses two kinds of risks.
“Higher oil prices do pose a risk to the inflation outlook, but they also pose a risk to global growth.”
Dr Chalmers said despite the events, the market’s expectations for interest rate cuts in Australia had increased rather than decreased.
“What that tells us is that the market is more focused on the implications for global growth,” he said.
Australia’s defence force chief, Admiral David Johnston, called for restraint and for all countries to pursue a diplomatic solution.
“The recent strikes between Israel and Iran represent a deeply concerning escalation,” he told a News Corp defence summit in Canberra.
“The risk of further regional instability is severe, particularly recognising ongoing volatility across the Middle East region in Gaza, Syria and Yemen.”
Admiral Johnston said all Australian Defence Force personnel assigned to the region were safe, and Defence would continue to monitor events and provide for their protection.
Foreign Minister Penny Wong said on Monday 350 Australians had registered for help to flee Iran, while 300 had asked for assistance in Israel.
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