Critical Perspectives Brief: The impact of geopolitical instability on policing - the Iranian case

This piece was written on the 7th of April. On the 8th of April, the Trump administration announced a two week ceasefire, which has been agreed to by both Iran and Israel. Additionally, the Trump administration has received a 10 point peace plan from Iran, noting “it is a workable basis on which to negotiate.” Iran has also reported the potential for peace talks to begin on the 10th of April in Islamabad, Pakistan. However, not withstanding these developments, the conflict does maintain the potential to continue to escalate, and the existing economic impacts on fuel prices, fertiliser availability, and manufacturing noted in this brief will continue to be felt in the near future even if the conflict were to end.

This brief explores some of the ramifications that have emerged from the current conflict in Iran. In particular, it looks at the existing pressures on the energy sector the conflict has generated, the potential trajectory of the conflict and its implications for Australia and New Zealand policing. 

Entering its 6^th week, the current conflict in Iran is unlikely to affect Australian and New Zealand policing through direct security spillover - its significance lies elsewhere. By disrupting global energy markets and supply chains, the conflict is already generating an economic shock that will translate into domestic pressure, such as fuel price increases, rising cost-of-living stress, and over time, increased demand across core policing functions. For policing, the issue is not the conflict itself but the conditions it creates.

What has happened in Iran

For the second time in eight months, the United States (U.S.) and Israel have conducted military strikes in Iran. Last June, Washington’s focus was almost entirely on Iran’s nuclear program, with the U.S. strikes hitting three of the Islamic Republic’s key nuclear facilities, and Israel hitting a wider set of strategic targets, including military commanders, missile launch and production facilities, and nuclear infrastructure.

This time, as part of Operation Epic Fury, the United States and Israel conducted a broader sweeping joint military operation against Iranian leadership and capabilities. On Saturday, February 28, the U.S. and Israeli militaries struck hundreds of sites across the country and targeted several top leaders, including Iran’s supreme leader, Ayatollah Ali Khamenei, who was killed along with members of his family and key advisers.

The cost so far

The most immediate second-order consequence of the conflict has been disruption to global energy markets. Within days of the initial attack, the world was plunged into an energy crisis. Tehran’s near shuttering of the Strait of Hormuz, through which roughly 20 percent of the world’s oil and liquefied natural gas (LNG) transit each day, amounted to the largest disruption of global energy flows in history. Within the first three weeks of the conflict, the market price of oil, gasoline, heating oil and jet fuel all spiked, with analysts warning that sustained disruption could push prices significantly higher and tip parts of the global economy toward recession.

Critically, this is not just an oil and gas story. Energy markets sit at the centre of the global economy, and disruptions cascade outward. Reduced fuel availability and higher prices are already affecting aviation, shipping, manufacturing, and agriculture. Fertiliser production, heavily dependent on petrochemical inputs, has become more expensive and less reliable, raising concerns about agricultural output and food prices in the months ahead.

For Australia and New Zealand, the exposure is indirect but acute. Neither country relies directly on Iranian energy exports, but both are highly dependent on global fuel markets and supply chains that travel through the Strait of Hormuz. As a result, global price shocks transmit quickly into domestic condition, and estimates indicate as much as $1 AUD per litre fuel price increase if key shipping routes remain disrupted, with broader inflationary impacts across transport, logistics, and food supply.

The key point is that the economic impact is neither contained nor temporary. Even in a scenario where active conflict subsides, the effects on energy markets, supply chains, and prices are expected to persist, and the fuel and cost-of-living pressures will likely be felt long after the conflict itself ends. These are not abstract economic concerns. Economic pressures are well-established drivers of increased demand across crime, disorder, and community tension.

The signals of escalation

Importantly, while there have been clear economic impacts already, current indicators suggest that the conflict trajectory is more likely to escalate than stabilise in the near term.

Iranian messaging continues to emphasise retaliation and strategic endurance, while the United States has signalled a willingness to sustain and potentially expand military pressure. Despite intermittent references to talks, there is little optimism that a negotiated solution to the conflict is forthcoming, at least in the short term.

Should the conflict escalate, the most likely pathway is the expansion of targeting to economic infrastructure, both within Iran and across the broader region. In a public statement, for example, U.S. President Donald Trump has warned of the “complete demolition” of Iran’s power plants and bridges in a matter of hours if the Strait of Hormuz is not fully reopened by the deadline that the President imposed. Should this eventuate, Iran’s proposed strategy for retaliation will be the targeting of economic infrastructure in the region.

The targeting of direct economic infrastructure has, up until now, not been a defining feature of the conflict. The one noticeable exception was the series of Iranian attacks on Gulf oil and gas facilities, after Israeli attacks on its own gas infrastructure. As part of this tit-for-tat exchange, Iran targeted Ras Laffan Industrial City, the world’s largest LNG export facility in Qatar. The attack has been noted to knock 17% of Qatar’s LNG export capacity, reducing LNG output for the next three to five years. Additionally, at the time of writing, Iran has recently struck oil refineries in Kuwait and Bahrain and a petrochemical plant in Abu Dhabi, the capital of the United Arab Emirates. The extent of the damage from these most recent attacks is currently unclear.

In the scenario that regional energy infrastructure is targeted more holistically, the timeline to the stabilisation of global energy market will be measured in months, if not years. Damage to production and transport systems takes time to repair, insurance and shipping costs remain elevated, and market volatility persists.

Under a prolonged escalation scenario, global economic impacts are likely to deepen. One estimate of a prolonged war scenario suggests world GDP growth would slow to 1.4% in 2026, 1.2ppts below our current baseline, before recovering to just 2.1% in 2027. Should oil prices stay above $150 USD per barrel for four months, global inflation would be pushed to 7.7%, close to the 2022 peak which followed Russia’s invasion of Ukraine.

In this scenario, the Australian and New Zealand economy would suffer a sharp recession, and would experience higher inflation rates.

Why this matters: one event in many

For police in Australia and New Zealand, the relevance of the Iran conflict does not lie in direct involvement, but in how global instability translates into local demand.

Rising costs, supply disruptions, and inflationary spikes contribute to a more volatile social environment. This can manifest in increased protest activity, particularly around cost-of-living and government policy, heightened community tensions, and greater strain on already stretched social services. The policing implication is a gradual but broad-based increase in demand, rather than a single discrete incident.

However, this latest escalation involving Iran should be understood not as an isolated geopolitical episode, but as part of a broader pattern and seemingly increased rate of occurrence of unprecedented shocks that are reshaping the global security environment. Events such as the October 7 attacks and subsequent conflict in Gaza have demonstrated how rapidly developments in distant theatres can reverberate into domestic policing environments across Australia and New Zealand. The war in Gaza triggered large-scale protests across Australia and New Zealand, alongside a reported increase in antisemitic and Islamophobic incidents.

At the same time, this pattern of disruption is not confined to the Middle East. Other recent developments, including intensifying conflict between Pakistan and the Taliban along the Afghan border, and the assassination of senior cartel figures in Mexico, illustrate how instability across multiple regions is producing security shocks for Australia and New Zealand. Each of these events carries the potential to reshape transnational criminal activity, influence extremist narratives, or generate ripple effects through diaspora communities and digital information environments.

For policing agencies in Australia and New Zealand, the key implication is that the operating environment is increasingly shaped by a steady cadence of global shocks rather than isolated crises. The challenge for policing is therefore less about predicting any single event, and more about recognising how successive disruptions across different regions accumulate to shape the security landscape at home.

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