In March 2026, the Strait of Hormuz, one of the most used naval shipping and trading routes, was blockaded, causing worries throughout the world.
According to the International Energy Agency (IEA, Feb 2026), nearly 25% of the world’s sea-based oil trade passes through the Strait, and that any disruptions would have major consequences for the world’s oil markets.
This has caused many gas station providers around the globe to increase their prices, including Australia.
A litre of diesel in Australia used to cost around $1.80 at the start of the conflict between US-Israel and Iran, to approximately $3 since late March. Unleaded petrol also increased in cost, from $1.60 to $2, to now being closer to $2.50 (Patrick Commins, The Guardian, Mar 24 2026).
Although the increase in fuel prices has become a major issue throughout, it has even greater reaching effects, affecting other areas of the economy, such as real estate.
Housing prices in Sydney and Melbourne have become greatly affected by the blockade of the Strait of Hormuz.
In Sydney, lower-priced houses saw increased values of about 2.5%, while higher-priced houses dropped by the same percentage. In Melbourne, market values paralleled Sydney’s, with lower-priced houses increasing by 0.6%, while higher-priced houses decreased by 1.9% (Luca Ittimani, The Guardian, Mar 31 2026).
The reason for the decreased median of house prices in these two cities, is mainly due to the Reserve Bank increasing interest rates. Currently, it is projected that by the middle of 2026, interest rates could be increased to almost 5%, while there could be three more interest rate hikes by the end of this year (Patrick Commins, The Guardian, Mar 24 2026).
Regarding the pending fears of fuel shortages, experts have said that it is recommended that the public remain calm and do not ‘panic buy’, as it would not only worsen the situation, but create a ‘self-fulfilling prophecy’ (Prof. Ben Fahimnia, cited by Emily McPherson, 9News, Mar 20 2026).
While the housing market has been affected by the conflict in Iran, with less homes being successfully auctioned off, it is advised for potential home buyers and owners to pay close attention, as the Reserve Bank of Australia could increase rates by May 5 (Luca Ittimani, The Guardian, Mar 31 2026).
Sources
https://www.iea.org/about/oil-security-and-emergency-response/strait-of-hormuz
