The War in Iran Is Already Pushing Up Your Power Bill — Here Is How to Stop It

On February 28, 2026, US and Israeli forces launched strikes on Iran. Within days, Iran retaliated by closing the Strait of Hormuz — the narrow channel between Iran and Oman through which roughly one fifth of the world’s oil and gas normally flows.

Shipping through the strait has virtually halted. Brent crude surged from around $70 to over $110 per barrel within days of the conflict beginning. LNG prices in Asia have risen by almost 60% since the war started. Iran’s Revolutionary Guard has vowed that “not one litre of oil” will pass through the strait, and threatened to drive prices to $200 per barrel.

For most Australians, this feels like a distant geopolitical crisis. It is not. It is already flowing directly into your energy bills — and the link is more direct than most people realise.

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How a War in the Persian Gulf Ends Up on Your Electricity Bill

Australia might be on the other side of the world from the Strait of Hormuz, but our electricity grid is more exposed to it than almost any other developed economy.

Here is the chain:

Gas powers a significant share of Australia’s electricity. According to the Department of Energy, gas contributes around 17% of Australia’s total electricity generation. During peak demand — evenings, winter, periods of low solar and wind — gas-fired power plants are often the last source standing. They set the wholesale price for the entire market, meaning even households on renewable energy plans end up paying gas-influenced prices.

Australia’s east coast gas prices are directly tied to global LNG export prices. In the first half of 2025, roughly 93% of the LNG Australia produced was sold overseas to countries like Japan, South Korea, and China. Because gas exporters can always sell on the international market, domestic prices follow global ones. When LNG prices spike internationally — as they have since the Hormuz closure — Australian gas prices rise too, even if domestic supply has not changed.

Australia also imports almost all of its refined liquid fuel. Around 90% of Australia’s petrol and diesel is imported. With Hormuz effectively closed, the government has declared a national fuel crisis, released emergency reserves, and lowered fuel quality standards to keep supply moving. The ASPI (Australian Strategic Policy Institute) has flagged that Australia’s layered exposure to Middle Eastern and South-East Asian chokepoints makes the current crisis particularly serious.

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Australia’s Energy Mix: Still Dangerously Exposed

[SEE CHART — embed interactive energy mix chart here]

Australia’s electricity generation in 2024 broke down as follows (source: Department of Energy, Australian Energy Statistics):

Coal: 45%
Solar (rooftop + large-scale): 18%
Wind: 12%
Gas: 17%
Hydro: 5%
Other: 3%

Gas sits at 17% of total generation — but its outsized influence on wholesale pricing means its real impact on your bill is far greater than that number suggests. On any given evening across NSW or QLD, gas-fired generators are frequently the marginal source of supply. When they are more expensive to run, the spot price for all electricity in the market rises with it.

East coast gas prices hit a record high of $13.26 per GJ in Q1 2025 — before the Iran conflict began. The conflict has pushed global LNG prices to levels not seen since the European gas crisis of 2022. Those increases take weeks to months to fully flow through to household bills, but they are coming.

This Is Not the First Time — and It Will Not Be the Last

The Strait of Hormuz has been threatened before. But the scale of the current disruption — with QatarEnergy declaring force majeure and suspending LNG production after an Iranian drone attack on its Ras Laffan facility — is unprecedented in the modern LNG era.

Qatar alone supplies 20% of the world’s LNG. With its facilities offline, global LNG markets are facing the tightest supply conditions since the 2022 European energy crisis. Asian LNG prices have surged 54% and European prices 63% in a single week following the start of the conflict.

Australia is caught in the middle. We export most of our LNG to Asia, we import most of our liquid fuel from the Middle East or via Middle Eastern supply chains, and our domestic gas prices follow international ones.

Even if the war ends tomorrow, the lesson is clear: Australia’s energy system is structurally exposed to events we cannot control, on the other side of the world.

This will happen again. Different conflict, different chokepoint, same outcome: global supply shock, domestic price spike, household bill increase.

Solar and Battery: The Only Way to Take Back Control

The difference between a home with solar and batteries and one without is not just financial. It is strategic.

When gas prices spike because a war in the Persian Gulf disrupts LNG supplies, a home with a well-sized solar and battery system barely notices. The sun still rises. The panels still generate. The battery still stores. The household’s exposure to wholesale market volatility is dramatically reduced.

This is not theoretical. During the 2022 European gas crisis, Australian wholesale electricity prices spiked significantly. Households with solar and batteries were insulated. Those without paid the full price.

Here is what energy independence actually looks like:

✅ Solar panels generate your own electricity — completely free of global gas markets
✅ A battery stores that electricity for use at night, when gas-fired plants are most active in setting prices
✅ You buy dramatically less from the grid — which means you are exposed to far less wholesale price volatility
✅ The July 1, 2026 free midday power window means your battery can also charge from the grid for free, further reducing your dependence on fossil fuels
✅ VPP participation earns you income from the energy you share at peak times

Solar and battery does not make you fully immune to energy market volatility — you still need grid connection for backup, and supply charges remain. But it insulates you from the biggest driver of bill increases: the wholesale cost of fossil-fuel-generated electricity.

The Global Energy System Is Not Getting More Stable

The war in Iran is the latest in a series of global energy shocks: the COVID energy price surge in 2021, the Russian invasion of Ukraine and the European gas crisis in 2022, Red Sea shipping disruptions in 2024, and now the Hormuz closure in 2026.

These events are becoming more frequent, not less. Each one demonstrates the same fundamental vulnerability: if your household is dependent on the global fossil fuel supply chain, you are at the mercy of forces entirely outside your control.

Solar and battery is not just a financial product. It is energy sovereignty. The ability to generate and store your own power, regardless of what is happening in the Persian Gulf, the Red Sea, or wherever the next crisis emerges.

The federal battery rebate currently offers up to thousands of dollars off the upfront cost of a home battery. Combined with solar panel incentives, it is the most affordable this investment has ever been.

You cannot control the price of oil. You cannot close the Strait of Hormuz. But you can stop letting those things control your power bill.

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