The Iran crisis is intertwined with oil and other natural resources, as is so often the case in global conflicts. It exposes Australia’s energy security problem.

As Australians crowd petrol stations and suffer energy price pain while the Middle East war widens, it has never been more urgent to end our addiction to fossil fuels.

With the International Energy Agency warning oil markets face the “largest supply disruption in history” and considering releasing further emergency stocks, we need an honest assessment of how Australia and its trading partners can achieve energy security.

Alongside the devastating human toll of the US-Israeli attacks on Iran and its retaliatory strikes, we need to recognise once and for all that global overdependence on a handful of unevenly distributed resources leads to instability.

Washington’s intervention in Venezuela also shows the nexus of oil and conflict, and how it spreads beyond the Middle East. Oil is not the only fossil fuel that regularly accompanies instability. The Iran crisis is also intertwined with gas, which was central to disruptions triggered by Russia’s ongoing war in Ukraine.

Fossil fuel wealth often compounds authoritarian tendencies. Demand concentrates in present or aspiring major powers, including the nostalgically insecure United States. 

Donald Trump’s administration has explicitly linked its Venezuela and Iran interventions to those countries’ oil reserves. Republican Senator Lindsey Graham even told Fox News that “we are going to make a tonne of money” from the Iran conflict. On Wednesday, Trump posted derisively about allies, including Australia, for not sending naval ships to help the US secure the Strait of Hormuz.

Despite what we often hear during crises such as these, mere reorientation of industrial and trade policies cannot deliver a sense of benevolent “energy independence” or even sufficient energy security, so long as fossil fuel dependence remains.

As current headlines attest, the US remains driven to devastating distraction, even after its transformation from import-dependent to largely self-sufficient on oil and gas in recent decades.

Australian interactions with fossil fuel geopolitics have been historically different but no less complicated than the American example.

We experienced the 1970s oil shocks as a heavily self-sufficient country. But, as domestic production declined and consumption continued growing, we eschewed even the heavily “securitised” insulation against energy market chaos seen in countries like the US and Japan.

While remaining wedded to fossil fuels, we trusted the efficiency of markets and private actors. This largely widened the gap between domestic abilities and needs — oil production where we needed it continued falling, along with our refining capacity and strategic reserves, while our reliance on just-in-time imports of mainly finished oil products boomed.

Recent responses to these outcomes have not eliminated our vulnerability to severe oil disruption, nor the challenge of pricing volatility.

Australia’s celebrated role as an “energy superpower” for coal and gas is also not what it seems.

Our purported ability to provide more “secure” resources than authoritarian counterparts was a particularly powerful fossil fuel lobbying call after Russia’s invasion of Ukraine. However, loose policy protections have long produced undesirable outcomes even for energy forms we have in relative abundance.

Producers have prioritised the needs of trading partners and foreign shareholders over Australian households and businesses. Energy shocks have seen Australians pay significantly more for our own resources, while delivering little in the way of expanded public revenue because of a flawed tax system.

As in oil, emerging responses in our net exporting sectors, led by increased reservation of gas for domestic use, will not alleviate the structural challenge of sustained fossil fuel dependence, whether for energy security, economic development, or other purposes.

The same is true of our trading partners. Though these countries might trust that we will not weaponise energy flows or suffer significant political instability, this does not shield them against other actors and actions constricting global supply and spiking prices. 

Promisingly, one of our top energy markets, South Korea, recognises the path to greater freedom. Its President Lee Jae Myung told a recent cabinet meeting the crisis is “a good opportunity to swiftly and extensively transition to renewable energy”.  South Korea has also committed to a coal power phaseout, threatening future Australian exports.

Australia and any of its international partners remaining securely co-dependent on fossil fuels would be a recipe for increasing irrelevance if, as it must, the broader global economy abandons them.

The greatest insecurity sustained by maintaining fossil fuels’ hold on our economy is the escalation of the climate crisis, which would diminish living standards, as well as Australia’s reputation among those more attuned to its risks, as in the Pacific.

Thankfully, the ability to effectively eliminate fossil fuel insecurity has significantly improved since the 1970s.

Dramatic reductions in cost and increases in the reliability of domestically sourced renewables, electrification of transport and other sectors, and other climate solutions have made these pillars of a sustainable energy security strategy.

China is rolling out renewables and electric vehicles at a rapid rate, in part to reduce dependence on imported fossil fuels. Like China, Australia might also seize unprecedented new economic opportunities in a decarbonised future, tied to our relative abundance of affordable wind and solar energy, and the material components of clean energy systems.

Uneven resource wealth will remain a key Australian asset in a climate-friendly economy. But a highly strategic and cohesive set of green industrial and trade policies is now far more critical for achieving lasting energy security.