The energy disruption that policymakers spent years modeling as a worst-case scenario is now running live. Iran’s Revolutionary Guard shut down the Strait of Hormuz on 28 February 2026, after the United States and Israel launched military operations against Iran. The Guard issued warnings forbidding passage, boarded and attacked merchant vessels, and laid sea mines across the strait.

The consequences are immediate and severe. The IEA’s Executive Director described the combined impacts as “the greatest threat to global energy security in history,” with global LNG supply reduced by around 20% since the war began.

Australia is responding accordingly.

Wong’s Diplomatic Push

Foreign Minister Penny Wong announced on Sunday that she would visit Japan, China, and South Korea this week for talks on energy security, citing disruptions caused by the Middle East conflict. The meetings are designed to ensure effective coordination amid global energy market upheaval.

All three countries sit among the world’s largest LNG importers, and all three depend heavily on supply corridors now under acute stress.

China, India, Japan, and South Korea together account for approximately 75% of oil and 59% of LNG exports from the Gulf region. A sustained closure does not affect them equally, it affects them simultaneously, creating a coordination problem that no single country can resolve alone.

Supply Risk Is Already Priced In

The market response has been severe. Brent crude surpassed $100 per barrel on 8 March 2026 for the first time in four years and reached a peak of $126 per barrel. As a result, March 2026 recorded the largest single-month increase in oil prices ever measured.

LNG markets followed just as quickly. Spot prices in Asia jumped over 140% as QatarEnergy declared Force Majeure on its contracts and subsequently shut down gas liquefaction at Ras Laffan, the world’s largest LNG facility.

Yet even a ceasefire does not reset the clock. Logistical disconnects, elevated insurance premiums, and security concerns mean supply through the Strait is unlikely to normalize for weeks after any formal reopening. Furthermore, markets understand this reality. Price premiums, therefore, are not unwinding on political announcements alone.

Australia’s Strategic Position

Australia enters this moment as an exporter, not an importer of LNG, which positions it differently from its Asian partners. But the picture is more complicated domestically. Australia imports most of its refined fuel, and around 83% of its maritime imports pass through the Indonesian straits of Malacca, Lombok, and Sunda. Hormuz closure is therefore only the first layer of vulnerability, disruption at any point along that maritime chain reduces Australia’s margin for error.

Canberra is leveraging its LNG export capacity to deepen ties with major Asian importers precisely when supply security has become the central priority for buyers. The objective is clear: buyers need supply certainty, exporters need long-term demand. Wong’s trip this week is an attempt to lock in both sides of that equation before the crisis runs longer.

A More Regional Energy Structure

What is emerging from this crisis is an accelerated shift toward regionalized energy frameworks. Crisis-driven capital is moving toward overland pipeline corridors, expanded storage outside chokepoint-exposed zones, and new transshipment architectures designed to reduce single-corridor dependency.

Reliance on global spot markets is giving way to bilateral coordination, faster than any pre-war policy timeline would have projected.

UNCTAD has flagged that rising energy, fertilizer, and transport costs may intensify cost-of-living pressures, particularly for developing economies with high debt burdens and limited fiscal space.

The crisis is not contained to energy markets. It is feeding through into food security, inflation, and public finances across the region.

What This Changes

Energy policy was already converging with foreign policy before February. The Hormuz closure has collapsed whatever distance remained between them. Decisions that would normally unfold over a decade are being compressed into months.

For Australia, the diplomatic push this week is not just crisis management. It is positioning. The lesson from the current crisis is not simply that Hormuz matters, it is that Australia’s fuel security, and its strategic relevance as a supplier, depends on a chain of maritime chokepoints that now demands active management rather than passive assumption.

Getting ahead of that chain, through bilateral agreements and coordinated contingency planning, is what Wong is in Asia to do.