On Wednesday morning US President Donald Trump posted to social media to brag that “a whole civilisation will die tonight” as part of an ultimatum delivered to Iran. By 9am Australian time, he declared a ceasefire had been reached.
Had Trump followed through on his threat to attempt a genocide against the Iranian people, the Iranian government was clear in how it would respond: seal the Strait of Hormuz shut, close the Bab al-Mandeb chokepoint off the coast of Yemen, and simultaneously strike every oil, gas and petrochemical facility within reach.
The result would have been an immediate heart attack in a finely-tuned, trade-dependent global economy heavily reliant on the movement of oil, gas and refined products across borders, one that has already been sputtering in what the International Energy Agency’s chief has described as the worst energy crisis since “the ones in 1973, 1979 and 2022 together.”
As it turns out, the Middle Eastern refineries that help make petroleum, fertilisers, medicines and crude oil are both extremely flammable and well-positioned when targeting retaliatory air strikes. Their output, totalling about one fifth of the world’s oil and gas, is shipped through the Strait of Hormuz.
For all the Trump administration’s bluster about dominating fossil fuel production and supply as a tool of influence and coercion, the fragility of fossil fuels and the geographical reality effectively gives Iran a kill switch over the global economy.
Meanwhile, renewables have helped blunt the worst of the impact to date. The world’s EV fleet avoided the consumption of 1.7m barrels of oil a day in 2025, equivalent to roughly 70 per cent of Iran’s exports that year, according to analysis by Ember Energy.
Pakistan has avoided USD$12bn in oil and gas imports since 2020 thanks to a rapid, and at times, haphazard renewables build-out.
For years it has been repeated again and again that gas is needed to firm renewables when “the sun doesn’t shine and the wind doesn’t blow”. Events have shown the opposite: renewables are needed to firm oil, gas and coal when the ship won’t go and the pipeline doesn’t flow.
Australia, too, will have benefitted from its embrace of renewable energy but the precarity of its situation as a vast, import-dependent island-continent heavily reliant on aviation and trucking to function has been made clear in the last few weeks.
Prime Minister Anthony Albanese, and Climate Change and Energy Minister Chris Bowen have been doing their best to stop panicked runs on service stations, particularly in regional areas, insisting that Australia has enough fuel through to the end of May.
Beyond this point, Bowen acknowledged in an interview with The Saturday Paper that there is a global “race” to secure additional supply.
Already the world is watching a repeat of what happened after the Russian invasion of Ukraine when rich European countries raided the spot market to secure their winter gas, leaving nothing for developing countries which then fell into crisis. Australian gas companies and Japanese traders, meanwhile, made out like bandits.
Even if the ceasefire holds and shipping resumes, production in the Middle East is likely to be offline for months, if not years, making shortages inevitable.
The question now is what happens next. In the last few days, the Coalition, predictably, has demanded Australia “drill, baby, drill”—a proposal that will no doubt be welcomed by groups such as Australian Energy Producers, for whom there is no problem that can’t be fixed by drilling for more hydrocarbon.
It shouldn’t need to be said but: right now, Australia needs to dig up, not down. Tripling down on its reliance on oil, gas and coal at a time of global shortage and instability deepens its vulnerability and simultaneously undermines any response to climate change.
To do otherwise, would be like declaring you really need to quit drinking before finishing the bottle—then lining up five more.
At this point, it is clear the only way to directly address the overwhelming energy security threat, one that permeates everything from the ability to harvest crops, to make medicines and to move people around, is to rapidly electrify as much as possible, as fast as possible.
So far this has received no real pick up among Australian media, with the national conversation being shaped largely by talking points from fossil fuel industry figures and their associations.
The biggest policy question in Australia right now is this: what will the government do to rapidly electrify everything?
Ironically, the Victorian government’s much-maligned gas substitution roadmap—loathed by industry and currently the target of Liberal Party attack ads ahead of the state election—offers a way forward.
As the most gas-dependent state in the country, the Victorian Labor government has been steadfast in its efforts to wean households off the fossil fuel. Events have now shown the wisdom of this approach.
The Victorian model needs to go national—and much, much further.
Every new EV on the road, every new induction cooktop, every new solar panel, every new home battery system, every new charging system, every new windfarm, every new train extension or bus service all helps to break the hydrocarbon chain by eliminating risk now and forever.
The test for whether the government is serious will be the upcoming budget. Earlier in March, Treasurer Jim Chalmers was flagging that support for those buying high-end EVs will come to an end, and the hugely popular home battery scheme is expected to be wound up.
Labor now has a rare opportunity to prove that its noble promises of building a better Australia are more than just rhetoric.
The Australian government should commit to large-scale public investment to rapidly electrify the country, with financial help targeted to renters, residents of apartments, those on lower incomes and farmers to ensure political support and neutralise opposition.
Should it do nothing, it will fail this test of leadership. If it simply allows existing programs to fall away, or worse, subsidises new oil and gas exploration and production, the decision will have been made to allow Australia to remain hostage to aging madmen and zealots.
Australia is very much on a clock. A global fossil fuel crunch is coming. It better get cracking.
