Weekly Wrap Up – 12 December 2025
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The world can feel a long way from Australia. But when it comes to oil, inflation and the share market, events in the Middle East have a way of arriving on our shores very quickly.
Over the past week, escalating conflict involving Iran, the United States and Israel has sent shockwaves through global energy markets. Oil prices surged as traders feared disruptions to supply through the Strait of Hormuz – the narrow shipping channel responsible for roughly a fifth of the world’s oil. At one point, crude spiked above US$110 a barrel, its largest jump in years, before swinging wildly as markets tried to price in how long the conflict might last.
For Australians, the first sign of that shock is already appearing at the petrol pump. Fuel prices across Asia and Australia have jumped sharply and regulators are now watching closely for price gouging as wholesalers pass on higher global costs. But the bigger story is what those higher oil prices could do to inflation.
Oil is the input cost that touches almost everything: transport, groceries, electricity, freight and manufacturing.
Financial markets have reacted quickly. The Australian share market has already shed tens of billions of dollars in value in recent days, with the S&P/ASX 200 suffering its biggest daily fall in almost a year as investors reassessed the outlook for global growth and interest rates.
And that brings us to next week. The RBA meets again. Soaring oil prices complicate the inflation outlook. The near 4 million Australians with a mortgage can be forgiven for feeling some fiscal fugue – last year the trajectory appeared to be for lower rates, now that has reversed. Bond markets are shifting. Tuesday 2:30 pm AEDT – that’s when many will be refreshing the RBA website when an announcement is due on what the next move in interest rates will be.
If you haven’t checked your super balance this week, now might be a good time, well maybe not in fact. Markets have had a sudden reminder that geopolitics still matters – and that events half a world away can move Australian wallets very quickly.
Top talking points
Conflict in the Middle East: Australia sent a surveillance aircraft and air-to-air missiles to the UAE to support Gulf states facing Iranian attacks. Richard Marles outlined that the deployment is defensive and does not involve combat troops.
Fuel Security: Chris Bowen convened an industry fuel taskforce summit to address concerns about regional shortages and panic buying, assuring that supply remains adequate despite Middle East-driven price pressures.
Agriculture Troubles: Australia’s farming sector fears escalating Middle East conflict could disrupt fuel and fertiliser supplies, warning contract prioritisation may cause shortages, raise costs and affect agricultural production.
Asylum Granted: Tony Burke granted asylum to several Iranian women footballers fearing persecution at home, while also proposing new powers to suspend visas for people arriving from Middle Eastern conflict zones.
Nationals Leadership: David Littleproud resigned as leader of the Nationals, with Queensland Senator Matt Canavan elected to fill his place.
Making headlines this week
Super Tax Changes
Nationals Leadership Spill
Following David Littleproud’s resignation as leader of the National Party, Matt Canavan was elected leader, defeating contenders including Kevin Hogan and Bridget McKenzie, with Darren Chester appointed deputy leader. In his first remarks as leader, Matt Canavan emphasised restoring confidence in the Nationals and positioning the party to “fight back” for Australians, particularly in regional areas. A major concern for Canavan is a resurgent One Nation, which is gaining traction in regional seats traditionally held by the Nationals. In the upcoming Farrer by-election, the Nationals are polling behind One Nation, the Liberals and a local independent, highlighting the growing competitive pressure on the party’s traditional base.
Things to watch
16 March: The RBA Monetary Policy Board will meet to decide on the cash rate.
16 March: The AFR will host the Banking Summit 2026 in Sydney.
16 March: Mike Doustdar will address the National Press Club, discussing chronic disease.
17 March: The New South Wales, Victorian, Tasmanian, Australian Capital Territory, and Western Australian Parliaments will sit.
17 March: The ABS will release Overseas Arrivals and Departures data.
18 March: CEDA will host Catherine King to discuss the Albanese Government’s infrastructure and transport priorities.
19 March: The ABS will release Labour Force data.
Intergenerational Tax Reform and Payment Consultation Developments
During an address to the National Press Club, Allegra Spender announced[paywall] a proposal for intergenerational tax reform, combining lower marginal tax rates with higher taxation of investment income. The plan includes reducing the CGT discount, phasing out negative gearing and aligning superannuation tax thresholds with personal income tax.
Consultation opened on draft legislation for a new regulatory framework for payment service providers, updating key definitions, including stored value facilities, and introducing new powers for APRA.
Visits, Henderson Defence Precinct and Defence Procurement Updates
Richard Marles travelled to Jakarta for a Defence Ministers’ Meeting with Indonesian Minister of Defence, His Excellency Gen (ret) Dr Sjafrie Sjamsoeddin. The visit aims to strengthen the Australia‑Indonesia Treaty on Common Security and build on the historic Defence Cooperation Agreement.
Pat Conroy appointed Bechtel Infrastructure Australia as the design consultancy for the master planning of Henderson Defence Precinct. The contract includes providing specialist infrastructure design advice and collaborating with stakeholders to develop the plan.
The Federal Government will invest $176 million to deliver 40 new Australian-designed and built Bluebottle uncrewed surface vessels (USVs). The contract with Ocius Technology will expand the Navy’s operational fleet to 55 Bluebottles, making it one of the largest sovereign USV fleets in the world.
Fuel Security Moves and Western Australian Developments
Following the International Energy Agency’s voluntary action to address global oil disruptions, Chris Bowen announced a temporary 60-day change to Australia’s fuel quality standards. The measure allows higher-sulphur petrol – normally exported – to stay in Australia, adding about 100 million litres to domestic supply each month.
The ACCC will increase scrutiny of fuel retailers after recent petrol and diesel price spikes linked to the Middle East conflict. The ACCC convened an emergency meeting with fuel companies, will publish weekly market updates, and investigate any misleading pricing or potential collusion.
In Western Australia, the $153.3 million Made in WA Energy Affordability Investment Program will provide low-interest loans of up to $15 million to help manufacturers invest in energy-efficient equipment, commercial solar and industrial batteries, lowering energy costs and supporting decarbonisation.
Infrastructure List, e-Safety, and M12 Motorway Moves
Infrastructure Australia released the 2026 Infrastructure Priority List, featuring 68 proposals that align with one of five key investment priorities: high-productivity freight networks; increased port capacity and connectivity; high-capacity transport for growing cities; secure and sustainable water systems; and advancing a net-zero, clean energy economy.
The eSafety Commissioner’s extension of Age Restricted Material Codes fully commenced this week, with a focus on preventing under 18s access to high-impact violence, pornography, self-harm material, and dangerous content such as suicide and disordered eating.
The New South Wales Government announced that the M12 toll-free motorway, which will connect drivers to the new Western Sydney International (Nancy-Bird Walton) Airport, will open on Saturday, 14 March.
NAPLAN, Education, and Employment
A technical failure prevented many students from accessing NAPLAN, Australia’s annual test for Years 3, 5, 7 and 9. The Australian Curriculum, Assessment and Reporting Authority apologised for the disruption, which remains under investigation.
The Department of Home Affairs doubled the Temporary Graduate visa (subclass 485) application fee from $2,300 to $4,600. The change took effect on 1 March, with universities and student groups warning it may deter graduates from staying for post-study work.
Mark Butler announced a $115 million investment to expand residential aged care capacity through the Aged Care Capital Assistance Program, funding additional beds in Adelaide, Illawarra, Perth and the Hunter.