The US-led military campaign against Iran is proceeding at a pace faster than planners anticipated, but the conflict's trajectory has already outpaced official confidence. US forces have struck nearly 2,000 targets in Iran since Saturday, according to Central Command, and global markets are pricing in a different outcome from what Washington and Tel Aviv expected when the strikes began.
US Secretary of State Marco Rubio announced on 4 March that the US-Israeli attacks on Iran are going to increase in their intensity, signalling that despite early operational success, the conflict may not resolve quickly. The strategic assumption that dominated planning appears to have been durability. Explosions continue to be heard for a sixth day in Iran, Israel, and across several Middle Eastern states after the United States and Israel began attacking Iran on Saturday, as Iranian retaliatory strikes continue hitting targets across the region.
The Economic Cost Mounts
The closure of critical shipping lanes and air corridors has triggered the kind of supply-side shock that economic authorities had hoped to avoid. Airspace closures in the United Arab Emirates, Qatar, Kuwait, and other Gulf states led to the grounding of thousands of flights, affecting major carriers like Emirates Airlines and causing significant losses in tourism revenue. Stock markets experienced declines, with the Dow Jones Industrial Average falling over 400 points on 2 March. Broader economic forecasts warned of inflationary pressures and slowed global growth if the conflict prolonged.
This is more than a geopolitical disruption. The Strait of Hormuz remains effectively closed, blocking roughly 20 per cent of global oil and gas trade. For Australia, a resource exporter sitting in the Indo-Pacific, the implications are twofold: energy costs will rise, and customers in Europe and North America will face weakened purchasing power if this drags on.
Australia's Unprecedented Challenge
Australia faces a consular problem of staggering scale. About 115,000 Australians remain in the Middle East, with 24,000 in the United Arab Emirates, according to official figures. Foreign Minister Penny Wong described it as "a consular crisis that dwarfs any Australia has had to deal with in terms of numbers of people".
The government's initial instinct was to organise major evacuation flights, but the physical reality on the ground has forced a shift in strategy. Many Australians in the Middle East are unable to leave due to airspace closures, including around major transit hubs. Road and land border closures may also restrict movement. Instead, the Albanese government has prioritised supporting the restart of commercial services as the faster, more efficient path home.
Australia currently has a plane from Dubai to Sydney with over 200 Australians on it and that follows the Foreign Minister's conversation with the Foreign Minister of the United Arab Emirates, Wong confirmed this week. Australia said three more commercial flights were scheduled to depart the United Arab Emirates on Thursday, suggesting the immediate crisis is beginning to show cracks.
The Strategic Uncertainty
Australia has pointedly not joined the strikes and has ruled out direct military participation. The government did not participate in the strikes, and would not be expected to participate, Wong told parliament. This reflects both Australia's desire to maintain independence and prudent recognition that the conflict's endpoint remains unclear.
On the legitimacy of the strikes themselves, the Australian government has adopted a careful position. While Wong has been critical of Iran's governance and nuclear programme, the Foreign Minister noted that prior to the weekend there were 41 different warnings and updates on travel advice about the possibility of conflict or instability in the Middle East. What is happening now is unprecedented because conflict is "not limited and not contained in the way that we have seen previously".
The Complexity Remains
Here lies the core of Australia's strategic position. The government's traditional scepticism of open-ended military commitments sits uncomfortably alongside its alliance obligations to the United States and its interest in regional stability. Iran's Nuclear programme and support for proxy militias across the Middle East have long posed genuine security concerns. Yet the opening assumption that regime change could be achieved swiftly appears to have collided with reality.
For Australia, the practical lesson is clear: manage the immediate humanitarian crisis, support the stabilisation of commercial infrastructure, and resist pressure to deepen military involvement until the conflict's trajectory becomes more certain. Reasonable policymakers can disagree on whether the strikes themselves were justified, but all can agree that protecting 115,000 stranded Australians and weathering the economic spillover demands disciplined, focused governance. So far, the government's response has been measured, if sometimes reactive to events beyond its control.