RBA now twice as likely to hike interest rate as US-Iran war drives fuel prices higher

Australia’s interest-rate outlook has shifted sharply, with market forecasts now pricing in roughly double the chance of a Reserve Bank hike as a worsening Middle East crisis pushes fuel costs higher and adds pressure to a slowing economy.

According to a monitored public feed from *The Guardian World*, the change comes as the fragile ceasefire between the United States and Iran breaks down again, sending Brent crude up by 23% over the past two weeks. The international oil benchmark is now back within reach of US$90 a barrel, a move that could filter quickly into transport and household energy costs in Australia.

The feed summary says experts are warning that the global energy market is at a “critical juncture,” with dwindling oil reserves and the renewed conflict creating fresh uncertainty for inflation and growth. For Australia, that combination is particularly sensitive: higher fuel prices can push up broader costs across the economy at the same time as activity is already slowing.

The Reserve Bank of Australia has been closely watched by markets in recent weeks as investors try to judge whether the central bank will need to tighten policy again. The latest market forecasts suggest the odds of a rate rise have doubled, reflecting concern that imported energy inflation could complicate the inflation outlook.

The report does not provide a specific forecast date or the exact probability attached to the move, but it indicates the market reaction has become more hawkish as the geopolitical situation deteriorates. The feed summary also frames the oil move as part of a broader squeeze on global energy supplies, not just a short-lived price spike.

For Australian consumers, the immediate effect is likely to be felt first at the pump. For policymakers, the bigger issue is whether sustained higher fuel costs could keep inflation elevated long enough to influence the RBA’s next decision.

This article is based on a monitored public feed and has been prepared from the available summary information. Source attribution is provided below.

Source: The Guardian World - https://www.theguardian.com/australia-news/2026/jul/22/rba-interest-rate-rise-likely-us-iran-war-markets-forecast