Middle East Tensions: Australian Gas Prices at Risk

0:00I'm Cory with the story, bringing you the latest from Sydney News today. Tensions in the Middle East are hitting close to home for Australians, with potential spikes in power bills on the horizon. Iranian reports claim the Strait of Hormuz is closed, a vital shipping lane for gas and oil from the Persian Gulf. Tancers have been struck and Qatar has halted liquefied natural gas production for at least two weeks, with another two weeks needed to restart. This could drive up global energy prices fast. Meanwhile, about 83% of the gas through that straight heads to Asia, including China, India, Japan, and Korea. Australia, the world's third largest gas exporter, stays exposed because East Coast markets are tied to international prices. Domestic gas costs have tripled since 2015, thanks to exports and depleting cheap fields. Tensions could feel at first in electricity bills, where gas makes up just 6% of the mix, but often sets wholesale prices during evening. Peaks when solar dips.

1:01It's also key for industry, fertilizers, food production, and three million homes for cooking and heating. Higher costs speed into inflation across the board. Experts compare this to the 2022 Russia Ukraine crisis when prices soared worldwide, but say it might resolve quicker since its aisle. Supply focused. The federal government stepped in last year, with rules for reasonable domestic prices and plans a gas reservation scheme by next year holding back, 15 to 25% of production for local use. Looking ahead, batteries and renewables offer real protection by cutting gas reliance in the grid and homes. Countries worldwide are rushing to clean energy for security, and Australia could follow suit to dodge future shocks. This story is shared with support from our sponsor. Your bedtime ritual just got better. Built-in-sound, built-in comfort, S-O-L-I-SOL-PILLOW.com. Built-in-sound, built-in-comfort, S-O-L-I-SOL-PILLOW.com.