Asian markets are wary as hostilities in the Gulf kept oil ‌prices elevated, complicating an inflation outlook that should keep most central banks on pause at policy meetings this week, barring one possible hike.

In a possible hint of hope, the Wall Street Journal reported the Trump ‌administration plans to announce as early as this week that multiple countries have agreed to form a coalition to escort ships through the Strait of Hormuz.

President Donald Trump told the Financial Times it ‌would be very bad for the future of NATO if the allies didn’t help.

European Union foreign ministers will discuss on Monday bolstering a small naval mission in the Middle East, though any operation in the Strait would be fraught with risk.

Oil markets were cautious as Brent rose 0.1 per cent to $US103.27 ($A147.77) a barrel on Monday, while US crude fell 0.7 per cent to $US97.99 ($A140.22).

Policymakers in the US, UK, Europe, Japan, Australia, Canada, Switzerland and Sweden hold their first full meetings since the start of the war, with energy prices looming over all of them.

“Central bank forecasts will immediately bias towards higher inflation and lower growth,” said Bruce ‌Kasman, chief economist at JPMorgan.

“Consistent ‌with this view, we have ⁠pushed back or removed action for most central banks that were expected to move in March and April.”

“Developments on the ground ​highlight the potential for further price increases and the likelihood that the risk premium will remain elevated.”

Japan’s Nikkei dipped 0.1 per cent, while South Korean stocks added 0.9 per cent after both lost ground last week. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent.

Regionally, the focus will be on Chinese economic data out on Monday with retail sales seen picking up in February after a dismal start to the year, while growth in industrial output is forecast to stay around five per cent.

Top US and Chinese officials are also meeting in Paris to discuss potential deals in agriculture, critical minerals and managed trade for US President Donald ⁠Trump and Chinese President Xi Jinping to consider in Beijing.

S&P 500 futures and Nasdaq futures ‌bounced 0.4 per cent in choppy ​trading. While earnings season is over, concerns about AI will be front and centre as Nvidia hosts its GTC conference at Silicon Valley this week, where it is expected to show off the ​latest advances in ‌chips and AI infrastructure.

The coming energy shock, combined with pressure on fiscal budgets from higher defence spending, saw bond yields globally suffer double-digit increases last week.

Ten-year Treasury yields were at 4.26 per cent, ​having climbed 32 basis points since the war began, while futures have sharply scaled back the scope for future rate cuts.

The Federal Reserve is considered certain to hold on Wednesday and the chance of an easing by June has come down to just 26 per cent, from 69 per cent a month earlier.

Investor attention will be on the tone of the statement ​and media ​conference, and whether the median “dot plot” projections from policymakers remove any further easing for ​this year.

A cautiously steady outcome is expected at all the other central bank meetings, bar ‌the Reserve Bank of Australia which is seen likely to hike its cash rate a quarter point to 4.1 per cent as it battles resurgent inflation at home.

The heightened volatility in markets has tended to benefit the US dollar as a store of liquidity.

The US is also a net energy exporter, giving it a relative advantage over Europe and much of Asia which are net importers.

The dollar was trading a touch lower early on Monday, partly in reaction to the report that shipping might be escorted through the Strait of Hormuz.

The dollar eased to 159.47 yen, just off a 20-month top of ​159.75, with investors wary in case a break of 160.00 triggers more warnings of intervention from Japan.

The euro was stuck near a seven-month low at $1.1440, threatening a breach of ​major chart support at $1.1392 that could unleash a ⁠retreat toward $1.1065.

In commodity markets, gold was little changed at $US5,022 ($A7,186) an ounce, having so far gotten scant support as a safe haven or ​as a hedge against inflation risks.

More than 400 million barrels of oil from International Energy Agency emergency reserves will begin flowing soon, the ‌agency says in its most detailed account of the rollout of the plan to combat ‌a spike in crude prices since the start of the Iran war.

Stocks from Asia ‌and Oceania countries will be available immediately and stocks from Europe and the Americas will be available at the end of March, the agency said on Sunday, four days after the agreement was announced.

Governments have committed to make available 271.7 million barrels of oil ‌from government stocks, ‌116.6 million ⁠barrels from obligated industry stocks and 23.6 million barrels from other ​sources, the statement said.

The bulk of the pledged reserves – 195.8 million barrels – are from member countries in the Americas, 172.2 million of that from government stocks, the IEA said.

Asia and Oceania member countries have committed to contribute 108.6 million barrels, 66.8 million of that from government stocks, ⁠and Europe has pledged 107.5 million ‌barrels, including ​32.7 million from government stocks.

The IEA statement said that 72 per cent of planned releases are ​in the form ‌of crude oil and 28 per cent are oil products.

Governments of 32 countries co-ordinate their strategic oil ​stockpiles through the IEA, which was formed in 1974 after the oil crisis.

This is the sixth co-ordinated stockpile release since the agency’s creation.

The release is ​aimed ​at combating a spike in oil ​prices caused by disruptions to about a fifth ‌of global oil and gas supply along the Strait of Hormuz since the war began February 28, according to the IEA.

Iran said on Wednesday the world should be ready for oil at $US200 a barrel as its forces continue to hit merchant ships ​on the strait.

IEA members hold emergency stockpiles of more than 1.2 billion barrels, with ​another 600 million ⁠in industry stocks held under government obligation.

Treasurer Jim Chalmers will argue conflict in the Middle East and its impact on the Australian economy justify fast-tracking tax reform, as households brace for higher interest rates.

The Reserve Bank had been widely tipped to keep interest rates on hold at its Tuesday meeting, but skyrocketing fuel prices caused by the US-led war on Iran have changed forecasts.

The big four banks expect a rate rise this week and another in May, which would bring the cash rate to where it was before the Reserve Bank first began cutting rates in February 2025.

Soaring fuel prices had treasury forecasting inflation in the “mid to high fours” range, Dr Chalmers said.

But while growth could be hit, there were no expectations Australia would enter a recession.

“I see developments around the world and pressures on Australians here at home not as a reason to go slower, but a reason to go further, and that’s the approach that I’ll be taking to the deliberations that I lead with the cabinet colleagues,” the treasurer told Sky News on Sunday.

“I’ll be working up a number of reform packages for this budget and they’ll be focused on savings, they’ll be focused on productivity.

“I’ll give the colleagues a whole bunch of options when it comes to tax reform.”

The Reserve Bank should leave the cash rate on hold at 3.85 per cent, AMP chief economist Shane Oliver said.

“There’s a strong argument to wait for some of the dust to settle till May,” he said.

Dr Oliver said if petrol prices continue at their current average of $2.26 a litre, inflation could reach about five per cent – well outside the Reserve Bank’s target band.

He said any tax reform needed to be implemented as part of a broader package, or Australians would face higher taxes.

Nationals leader Matt Canavan said Labor’s spending had placed Australia in a much weaker position.

“This is why it’s so important for a government to be able to take the sometimes tough decisions that deliver better results for the Australian people,” he told Sky News on Sunday.

“The government has not been saving for a rainy day, and a rainy day has arrived, and we don’t really have a roof over our head.”

Greens leader Larissa Waters said Australia must use every diplomatic lever available to pressure the US into ending its war against Iran.

“The RBA should not lift rates when this latest inflation pressure is a supply side mess caused by a pointless war that rate rises can’t stop,” she said.

“The RBA must not punish people for inflation caused by an illegal war that Labor is supporting.”

Four women from the Iranian soccer team who were granted humanitarian visas have decided to return to their homeland.

The players who previously defected from the squad were presented with multiple options after informing Australian officials of their decision, Home Affairs Minister Tony Burke said on Sunday.

“The Australian government has done everything we could to make sure these women were provided with the chance for a safe future in Australia,” he said.

“While the Australian government can ensure that opportunities are provided and communicated, we cannot remove the context in which the players are making these incredibly difficult decisions.”

Mr Burke said on Sunday morning that three players who had sought asylum decided to return to Iran on Saturday night.

AAP understands that a fourth member of the team also changed their mind and has left Australia.

Seven members of the football team were granted asylum but one woman decided to return to Iran hours after accepting the offer.

The women who stayed in Australia had to be moved to a safer location because the player had given away their location when contacting the Iranian embassy.

The team, which had competed at the AFC Women’s Asian Cup, left a Gold Coast hotel on Tuesday afternoon under police guard, with one player appearing to be dragged by a teammate onto a bus.

There are fears for the rest of the team’s safety on their return to Iran after they were labelled “wartime traitors” on Iranian state media for refusing to sing the national anthem before their opening match.

Appearing on ABC TV on Sunday morning, Treasurer Jim Chalmers said the Iranian women were “under extreme and extraordinary pressure”.

Conflict in the Middle East continues to widen with intensified attacks on Iran and retaliatory strikes targeting multiple Gulf countries.

Oil prices ‌could extend gains when markets open as the US-Israeli war against Iran enters a third week, putting oil infrastructure at risk ‌and keeping the Strait of Hormuz shut in the world’s largest supply disruption.

US President Donald Trump threatened further strikes on Iran’s Kharg Island oil export hub, drawing a defiant response of further retaliation from Tehran.

Brent and US West Texas Intermediate crude futures have already spiked sharply and rattled global financial markets. 

Both contracts have surged more than 40 per cent so far in March ‌to their highest ‌levels since 2022 ⁠after the US-Israeli attacks on Iran prompted Tehran to halt shipping through the Strait ​of Hormuz – a key chokepoint for one-fifth of global oil supply.

Trump has urged China, France, Japan, South Korea, Britain and others to deploy warships to secure the strategic gateway.

The US struck military targets on Kharg Island on Saturday, which was swiftly followed by Iranian drone attacks on a key oil terminal in the United Arab Emirates.

“This marks an escalation ⁠in the conflict,” JP Morgan analysts led by Natasha Kaneva said.

“Until ‌now, the ​region’s oil infrastructure has largely been spared.”

Besides UAE’s Fujairah, Saudi Arabia’s Ras Tanura export terminal and Abqaiq oil processing facilities ​have been listed as ‌critical and highly vulnerable energy nodes in the Gulf, the analysts said.

However, oil loading operations at Fujairah have ​resumed, a Fujairah-based industry source told Reuters on Sunday.

Fujairah, outside the Strait of Hormuz, is the outlet for about one million barrels per day of the UAE’s flagship Murban crude oil – a volume equal to ​about ​one per cent of world demand.

Global oil supply is expected ​to fall by eight million bpd in March due to ‌disruptions to shipping while Middle Eastern producers have cut output by at least 10 million bpd, according to the International Energy Agency.

On Thursday, the agency agreed to release a record 400 million barrels of oil from strategic stockpiles held by member nations to combat price spikes. 

Japan plans to start releasing its oil on Monday, with Tokyo pledging to release a record 80 million barrels – about 45 days of supply for the resource-poor nation.

The government has asked Japan’s refiners to use the released crude, which will reduce the national reserves by 17 per cent, to secure domestic supplies.

Meanwhile, the Trump administration has rebuffed ​efforts by Middle Eastern allies to start diplomatic negotiations, according to three sources familiar with the efforts, while Iran has ​rejected the possibility of any ⁠ceasefire until US and Israeli strikes end, dimming hopes of a quick end to ​the conflict. 

US President Donald Trump is threatening further strikes on Iran’s Kharg Island oil export hub and urging allies to deploy warships to secure the Strait of Hormuz, an artery for global energy supplies, as ‌Tehran vows to intensify its response.

With the US-Israeli war on Iran in its third week, Trump said US strikes had “totally demolished” much of the island and warned of more, telling NBC News on Saturday, “we may ‌hit it a few more times just for fun”.

The remarks marked a sharp escalation from Trump, who had previously said the US was targeting only military sites on Kharg, and undercut diplomatic efforts.

His administration has rebuffed efforts by Middle Eastern allies to start negotiations, three sources told Reuters.

The war showed no sign of ending. Trump said Tehran appeared ready to make a deal to end the conflict but that “the terms aren’t good enough yet”.

Tehran’s ability to halt shipping through the Strait of Hormuz, through which one-fifth of the world’s oil passes, poses a difficult problem for the US ‌and its allies.

Energy ‌prices are soaring as the war ⁠causes the biggest-ever disruption in oil supply, and the energy crisis looks set to continue.

“The Countries of the World that receive ​Oil through the Hormuz Strait must take care of that passage, and we will help — A LOT!” Trump wrote in a social media post on Saturday.

“The US will also coordinate with those Countries so that everything goes quickly, smoothly, and well.”

Iranian Foreign Minister Abbas Araqchi said Iran would respond to any attack on its energy facilities.

Iran’s Revolutionary Guards said on Sunday they had carried out missile and drone strikes on targets in Israel and three US bases in the region, calling the attacks the first round of retaliation for workers killed in Iran’s industrial areas.

The Israeli military said it was intercepting incoming launches.

Saudi Arabia intercepted and destroyed ⁠10 drones in Riyadh and the east, the defence ministry said.

Iran’s Revolutionary Guards said they had no connection ‌to the attack, the semi-official Fars ​news agency reported.

A drone attack disrupted a major United Arab Emirates energy hub on Saturday, and the US warned US citizens on Saturday to leave Iraq.

The war that Trump and Israeli Prime Minister ​Benjamin Netanyahu launched on ‌February 28 has killed more than 2000 people, mostly in Iran, according to reports from governments and state media.

At least 15 were killed when an air strike hit a refrigerator and heater factory ​in the central Iranian city of Isfahan, the semi-official Fars news agency said on Saturday.

Russia is supplying Iran with Shahed drones to use against the US and Israel, Ukrainian President Volodymyr Zelenskiy told CNN.

Shahed drones have been linked to other attacks on countries in the region, although their manufacturers are not always clear.

Oil market disruptions ​look ​unlikely to end soon.

Some oil-loading operations were suspended in the UAE’s Fujairah emirate, a ​global ship-refuelling hub, after a drone attack, industry and trade sources said on Saturday.

Trump, in a ‌post on his Truth Social platform, urged China, France, Japan, South Korea, Britain and others to send warships to the Strait of Hormuz.

None of those countries gave any immediate indication they would.

Takayuki Kobayashi, Japan’s ruling party policy chief, declined to rule out the possibility, but told public broadcaster NHK “the (legal) threshold is very high”.

Japan interprets its pacifist postwar constitution to mean it can deploy its military if the nation’s survival is threatened, but the government would have to invoke a 2015 security law that has not been used.

France is seeking to assemble a coalition to secure the Strait of Hormuz once the security ​situation stabilises, while Britain is discussing a range of options with allies to ensure the security of shipping, officials have said.

Iran’s Supreme Leader Ayatollah Mojtaba Khamenei, who replaced his slain father, has ​said the Strait of Hormuz should remain closed.

Rationing fuel in Australia’s major cities to supply the regions would cause unnecessary economic and social issues, a peak motoring body says.

Iran has closed the strait of Hormuz, one of the world’s most important oil corridors, after the country was attacked by US and Israeli forces.

The conflict in the Middle East has spiked oil prices, sending unleaded petrol prices in Australia above $2.20 a litre, and diesel to more than $2.60 a litre.

Fuel transport companies support a proposal by One Nation MP Barnaby Joyce to reserve fuel for farmers and regional areas as the Iran war drags on.

Mr Joyce argues this would ensure supermarket shelves remained stocked and other key industries could continue operating.

Fuel should have already been reserved for the regions, said Westlink Petroleum managing director Danny Kreutzer, whose Queensland-based company transports fuel for 500 businesses.

But NRMA spokesman Peter Khoury said the organisation did not support the proposal.

“It will have an economic and social connection impact and we believe it’s unnecessary,” he said.

“Fuel supplies have continued throughout this war and urge Australians not to panic buy and stockpile, particularly diesel.”

Mr Joyce said Australia should be part of a global effort to end Iran’s blockade, as US President Donald Trump calls on countries to step up.

“If you are part of a beneficiary of it being resolved, you got to do something for it,” he told ABC’s Insiders.

Mr Khoury said there were reports in some locations of people buying four times the amount of fuel usually sold.

“When Australians are stockpiling fuel in jerry cans in homes, that behaviour will inevitably lead to shortages,” he said.

“If that behaviour stops, it will go a long way to stabilising the situation.”

The federal government on Friday announced up to 762 million litres of petrol and diesel from the emergency reserves of companies would be released to address shortfalls.

Energy Minister Chris Bowen has repeatedly provided assurances Australia has enough fuel and said shortages were down to people stockpiling.

He has also rejected calls to bring in fuel rationing in metropolitan areas.

Treasurer Jim Chalmers said the nation had plenty of fuel.

“We’ve got big stockpiles of fuel, whether it’s petrol or diesel or jet fuel, and we work around the clock to make sure that Australia doesn’t run out, we’re certainly not expecting that we will,” he told Sky News on Sunday.

Labor has also relaxed its fuel quality requirements, meaning higher sulfur petrol usually reserved for export can be sold in Australia in a bid to tackle increased demand.

Nationals Leader Matt Canavan said despite there being enough volume of fuel in Australia, it was a “small mercy” for farmers and businesses.

“When they go to the petrol station or they call their contractor and there’s no fuel available, they’ve got a supply crisis,” he told Sky News.

The last time the US embarked on a Middle East military intervention, then-Secretary of Defense Donald Rumsfeld ruminated on the challenges of unknown unknowns.

Two decades later, as Donald Trump wages war in Iran rather than Iraq, unknown unknowns are complicating matters for the Reserve Bank of Australia.

Until a week ago, the central bank was widely expected to keep interest rates on hold at its March board meeting, which wraps on Tuesday.

But that changed with the conflict in the Middle East, which has blocked the passage of oil through the Strait of Hormuz, amid scenes of tankers ablaze in the Persian Gulf.

Analysts warn benchmark oil prices could soon exceed $US150 a barrel and cause inflation – already at 3.8 per cent – to fly further from the Reserve Bank’s two to three per cent target band. 

What happens to the price of oil is what Mr Rumsfeld would have called an unknown unknown – as are the effects the February hike has had on Australian consumers and how long the Strait of Hormuz will remain closed.

The Reserve Bank can’t know to what extent these concerns will drive up inflation but as deputy governor Andrew Hauser revealed in a recent podcast interview, it is more worried about high inflation than growth, HSBC chief economist Paul Bloxham said.

“The market has taken this interview as guidance that a hike is more likely in March than not,” Mr Bloxham said.

Mr Trump’s unpredictability means forecasting is a mug’s game.

Treasurer Jim Chalmers said scenarios were being modelled where inflation peaks at mid to high fours, due to the US-led war on Iran.

“The source of the most extraordinary volatility in our forecast and in the economy … is really how long this (Iran war) drags out for,” he told Sky News on Sunday.

“We know already that it’s a very substantial shock.”

The situation could change entirely between the Reserve Bank board entering its lock-up on Monday morning and its cash rate announcement at 2.30pm on Tuesday.

AMP chief economist Shane Oliver said the Reserve Bank should leave the cash rate on hold at 3.85 per cent given the uncertainty.

“However, we now think the RBA will hike on Tuesday,” Dr Oliver said.

The bank appeared concerned the war’s impact on oil prices would add to inflation expectations, making it even harder to bring price growth back down, he said.

The big four banks predict a rate rise and another in May, which would bring the cash rate back to 4.35 per cent – where it was before the Reserve Bank’s first rate cut in February 2025.

The central bank will release its biannual Financial Stability Review on Thursday while the Australian Bureau of Statistics will release jobs data.

Dr Oliver expects the labour force survey to show a 25,000 rise in employment but a slight rise in unemployment to 4.2 per cent.

Like everyone else, Wall Street investors are mulling the impact of war in Iran on global oil supplies as erratic prices whipsaw ‌equities.

All three major US stock indexes logged declines on Friday and for the week.

The Dow Jones fell 119.38 points, or 0.26 per cent, to 46,558.47, the S&P 500 lost 40.43 points, or 0.61 per cent, to 6,632.19 and the Nasdaq lost 206.62 points, or 0.93 per cent, to 22,105.36.

Australian share futures plunged 61 points, or 0.70 per cent, to 16,387

The S&P/ASX200 fell 11.9 points on Friday, down 0.14 per cent to 8,617.1, as the broader All Ordinaries lost 12.3 points, or 0.14 per cent, to 8,839.1

This concluded the local market’s second straight week of losses and its worst fortnight since mid-2022.

Three women from the Iranian soccer team who were granted humanitarian visas have decided to return to their homeland.

The players who previously defected from the squad were presented with multiple options after informing Australian officials of their decision, Home Affairs Minister Tony Burke said on Sunday.

“The Australian government has done everything we could to make sure these women were provided with the chance for a safe future in Australia,” he said.

“While the Australian government can ensure that opportunities are provided and communicated, we cannot remove the context in which the players are making these incredibly difficult decisions.”

Seven members of the football team were granted asylum but one woman decided to return to Iran hours after accepting the offer.

The women who stayed in Australia had to be moved to a safer location because the player had given away their location when contacting the Iranian embassy.

The team, which had competed at the AFC Women’s Asian Cup, left a Gold Coast hotel on Tuesday afternoon under police guard, with one player appearing to be dragged by a teammate onto a bus.

There are fears for the rest of the team’s safety on their return to Iran after they were labelled “wartime traitors” on Iranian state media for refusing to sing the national anthem before their opening match.

Appearing on Insiders on Sunday, Treasurer Jim Chalmers said the Iranian women were “under extreme and extraordinary pressure”.

Conflict in the Middle East continues to widen with intensified attacks on Iran and retaliatory strikes targeting multiple Gulf countries.

Dolloped on a plain cracker is the ideal way to let the rich, umami flavour of Vow’s smoked Japanese quail spread shine.

So says the Australian startup’s head of manufacturing Matt Wilkinson, who took a jar of the lab-grown creation home at Christmas to rave reviews.

It’s been roughly nine months since the food tech company’s cultivated meat received the green light from regulators for sale in Australia and New Zealand.

The Japanese quail smoked spread, foie gras and parfait have since been appearing on fine-dining menus around the country and are now being served in dozens of venues worldwide.

While the products are not everyone’s cup of tea, Mr Wilkinson says the response has been generally positive.

“We’re getting really good feedback,” he reports during a public tour of the company’s Sydney facilities during Climate Action Week.

After securing hard-fought regulatory approval to take lab-grown meat to market in its home country, Mr Wilkinson says expanding the reach of the “Forged” products, as they have been branded, has been the priority.

They can now be found in boutique local markets and purchased online but it might be a while before they land in major supermarkets.

The premium market has been targeted purposefully to build social acceptance and refine the offering, company founder and chief executive George Peppou says.

“Chefs who push boundaries, diners who seek out new experiences – they’re not just your first customers, they’re your best development partners,” he says.

Lab-grown meat cannot yet compete head-to-head with established farming practices, but Mr Peppou says the economics are improving with every cycle.

To make cultivated meat, cells from sample animals are put in bioreactors and fed nutrients to grow.

The cells must be kept at the right temperature, agitated gently and monitored closely to help them rapidly proliferate.

The main 20,000 litre reactor – resembling a brewery fermentation tank – is now capable of yielding 250 tonnes a year. 

Creating novel meat products is another guiding principle, rather than trying to compete directly with chicken, beef and other common proteins.

The team has tried growing everything from alligator to peacock cells but unlike the Japanese quail, not all deliver on taste, texture and scalability.

More promising products are in the works, including the company’s first designed around improved nutritional value, due for launch soon.

Further uses for cultured cells are also being explored, with potential applications in cosmetics and other sectors.

Vow is coming of age as the broader market for alternative meat – dominated by products made from plants – faces setbacks.

Interest exploded in the 2010s as the environmental footprint of animal protein came into focus but demand for meat stand-ins never quite met lofty expectations.

Mr Peppou says his company never wanted its products to be viewed as an alternative to meat.

“We wanted it to earn its place on a menu because it’s genuinely delicious and interesting,” he says.

Focusing on premium dining has helped Vow begin building that reputation, with the goal to gradually make cultivated meat more accessible and provide a supplementary source of sustainable protein.

“The sustainable food system I believe in isn’t one where people stop eating meat,” Mr Peppou says. 

“It’s one where meat eaters have more interesting options.”

Demand for meat is expected to increase by 40 to 100 per cent by 2050 as the global population approaches 10 billion, yet animal agriculture already takes up 80 per cent of farmland.

These numbers fuel the company’s pursuit of sustainable proteins.

Early results of life cycle analysis suggest the cultured quail’s greenhouse gas profile is roughly 90 per cent lower than that of beef and should shrink further at scale.