Breakfast Wrap: Could the Strait of Hormuz stay shut post US-exit?

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From Wondry Country, I'm Luke Sidham Dunton and today on the Breakfast Wrap, could the

United States end the war with Iran without resolving the effective closure of the

strait of hormones?

We're going to unpack why this is a growing concern this morning.

You'll hear what governments from Europe to Canberra have to say about it, as well as

the federal opposition.

This enormous sympathy with the problems of removing a regime that was involved in exporting

terrorism around the world, but we need to be extremely mindful that if you start a conflict

like this, the expectation I think of everybody is that you finish it.

Shadow Treasurer Tim Wilson there who will also answer questions around why one of his colleagues

is freelancing, one is portfolio, all of that coming up.

From the Radio National Breakfast Team, this is the Breakfast Wrap.

So there is growing speculation that the United States could exit the war with Iran without

putting things back the way they were, specifically regarding the strait of hormones.

Before we get all the reaction to that proposition, I just want to walk you through why this perception

is growing.

The concern is partially being fueled by comments overnight from the Defense Secretary

Pete Hegseth, and he's doubling down of Donald Trump's comments.

We woke up this morning to more criticism from Donald Trump, lashing out on social media

to allies who haven't come to help him reopen the strait of hormones.

He says, quote, build up some delayed courage, go to the strait, and go get your own oil.

He says the US won't be there to help anymore, just like you weren't there for us.

Now of course, that was put to Pete Hegseth when he faced reporters overnight.

He was asked how big a priority reopening the strait was for Washington, specifically

if it was an essential objective to Operation Epic Fury or if it was fast becoming the

responsibility of other countries.

Our core objectives from this podium from day one have been clear.

It's missile production and missile programs, defense industrial base and production ability

to build a Navy and power projection.

And then of course, wrapping it all is Iran's never going to have a nuclear weapon.

So those have been very clear.

But ultimately, I think the President's truth this morning lays that out very well that

this strait of hormones issue is not just a United States of America problem set and he's

pointing out, you know, you might want to start learning how to fight for yourself.

Pete Hegseth there relying on his former Fox News commentary skills to sell the President's

social media posts.

But importantly in that answer, he did not say that reopening the strait was a key objective

of the war.

Pete Hegseth pointed to all these other things that the administration has been saying it's

already accomplished.

And that notion that Washington has completed its initial objectives is catching on.

This week on 730 we heard the Prime Minister Anthony Albanese say that the objectives

outlined at the beginning of this conflict have been largely achieved.

But largely in most cases, not everything reaches 100%, but I think the President is in

a position whereby he can claim that he has achieved the objective that he set out

to.

But what about the problems that have been created by this conflict?

Is there a risk that the US and Israel could say mission complete without doing the washing

up?

So what does the Australian government think about that risk?

This morning, Sally Sarah interviewed Labour Front Bencher Catherine King.

She's the Federal Minister for Infrastructure, Transport, Regional Development and Local

Government.

But Sally started with this latest criticism from the US President and the prospect that

the straight-of-all moves could remain effectively shut for now.

What do you make of these latest comments from Donald Trump urging allies to go and get

their own oil?

Well, I think that we've said right at the start of all of this sort of running a running

commentary on everything that President Trump has saying around a range of matters, and

so will it really.

But I'd leave that with them.

What we're doing is no doubt that the war in the US is the president of the US.

This is the party that started the conflict.

Yeah, of course.

We take everything that our allies say very seriously.

We obviously were consulted about the war in the Middle East, but we are bearing the

consequences of what has occurred and the whole world is.

And so, of course, what we are doing through our efforts here is to try and shield Australians

from the worst of it in the best way that we can.

We, of course, said very clearly our view is that this war, the sooner it ends, the

better it is for our economy and the world's economy as well.

And we'll continue through diplomatic efforts to talk with the US about when they see they're

going to exit what the consequences of that are going to be.

But certainly, my job as Infrastructure and Transport Minister has been to look at how

domestically do we respond to what has been an increase in prices on fuel over because

of a war in the Middle East.

Minister, how long can fuel supplies remain at a workable level in Australia if the

straight-of-formers remains effectively closed?

Well, you're seeing the world adjust already now.

So, many of the suppliers of oil are seeking alternate markets, seeking alternate routes,

and that is all working its way through the system.

At this stage, as you're aware from the climate and energy minister, our suppliers remain

as they were when this conflict started.

We are obviously watching and monitoring that very closely to prepare for the longer,

obviously, the strait is closed.

The longer the war continues, the longer the impacts are on our economy and our domestic

supply.

But at this stage, as of today, we continue to receive the amounts of oil and then are able

to refine that here in this country in the same way we have done previously.

Government Minister Catherine King there.

Well, later on, I will bring you the reaction from the Federal Opposition because they're

being a little firmer with their words.

As someone else who is being equally as cautious as Canberra, a country is in Europe, particularly

NATO members who have been getting used to the frequent sledges from Washington.

This morning, we also heard from Sweden's ambassador to Australia, Klaus Mulin, who also responded

to the President's latest outburst.

Well, I think, as you know, it comes, I haven't seen the tweets on the comments myself.

I saw a reference to them.

They come with a backdrop for us.

There is a backdrop of discussions about European members of NATO not stepping up over some

time that the President has issued, as you know, there was a NATO summit, and there

is an annual summit.

There was a summit in the Hague last summer, which it was agreed that members would step

up their commitments on defence spending, and also on the civilian total defence side,

I think, as a direct response to some of the earlier comments and the backdrop, as I

say, to European commitment to NATO.

The President Trump has singled out the UK and France in these latest criticisms ambassador,

but more broadly, what could this mean for NATO?

Well, I think it's important to, again, look at this in a much broader context and the

longer discussion that we've had.

I think there is realisation and acceptance among European NATO partners that Europe needs

to take a bigger role and take more responsibility, including financially, for its own defence.

Klaus Mulin, the Sweden's ambassador to Australia.

Now, it's not just governments having to weigh up the prospect of the straight staying

shut, even if the war does come to an end soon, as our business and economics correspondent

Carrington Clark explains, markets were this morning responding to the potential for a near

end to the war.

There has been this burst of enthusiasm on the markets, traders are excited by the signs

that perhaps the war could be coming to a close, but one of the buds is Donald Trump seems

to be okay with declaring mission accomplished, even with the Strait of Humors closed, that

he's actually stating very clearly that this isn't one of their priorities and that other

countries need to take ownership of opening up that Strait of Humors, which means even

if America declares that they have found that almost mystic exit ramp at this point, that

it could still mean that we're dealing with a major interruption to the flow of oil.

Now, the timing is also interesting, particularly on the American side.

We spoke yesterday about how we'd seen West Texas intermediate.

This is the most important price of oil for Americans, had settled above $100 US dollars

about, I suggested that perhaps that would cause even more political pressure to be put

on Donald Trump.

Well, that's immediately flowed through to the price of fuel that are petrol that Americans

are paying for.

What they call gas is now, has now breached on average $4 a gallon, which is how they measure

it.

And that is even more critical in actually mounting a political blowback against Donald Trump.

You can see why he has every motivation to try to get out of this situation.

Now, this is all really people buying on rumors at the moment, and therefore we could see

them sell it on the fact if we don't actually see these negotiations go anywhere.

But at the moment, at least investors are buying the story that perhaps we're getting

closer to this being resolved.

And that's why we've seen such a strong rally in the US.

Counting clock there on this response from oil markets to the prospect of the war coming

to an end sooner rather than later.

So keeping all of that in mind, what are the other factors maintaining this conflict?

And not just the what's, but the who's?

That is something our next guest answered for us.

Alison Miner was Joe Biden's deputy special envoy for Yemen.

And in the first Trump administration, she directed Arabian Peninsula Affairs on the

National Security Council.

Here is her interview with Sally.

In this conflict, we've often asked the question, how soon can the war end?

But if we're looking at nation states, entities, individuals, who actually wants to keep

this war going?

You know, it's a good question, Sally.

I think if we look at the Gulf countries who are getting hit the hardest by Iranian missiles

and drones here, they're in a bit of a conundrum.

They both want the war to end because it's having serious national security and economic

consequences for them.

But they also don't want to be in a state of perpetual war.

You remember we had the 12th day war, you know, just a few months ago, it last summer 2025.

And I think what they're afraid of is this war ends and then another five, six, seven months

from now, another war, perhaps if even greater magnitude breaks out again.

That would be the worst case scenario for the Gulf countries.

That being said, how exactly you get to a durable resolution of this conflict that makes

sure that war doesn't break out again?

That's difficult to determine.

And that's where you see some divergences between different countries where you have the

homonies seeking to end this as soon as possible, but because they assume it's only going to

get worse.

And then you have the Saudis and the Emirates who are seeking to get that more, you know,

that stronger resolution that puts guardrails on Iran's behavior.

And they believe that, you know, if the war continues, that might be achievable.

I think you look over towards Israel and they are very focused on this target list that

they're trying to accomplish taking out, particularly the Iranian naval missile and other long

range attack capabilities, because that's what threatens the Israelis the most.

And they really want to see that target list completed.

And I think they have less concern over what happens in Iran after the war is over because

they're just not as proximate and they won't face the level of threats that the Gulf countries

will. And then you look to, you know, the more secondary actors, the Europeans, Asian countries,

whose primary consequences from this war are from the closure of the straight-of-war

news. And they're the ones that really just want to get that straight open as soon as possible.

If we're looking at the dollars and cents of this war, how is it playing out financially for Russia

right now?

The Russia is benefiting from this war because of the higher oil prices, which translates into

revenues for them. And, you know, they also see this as a potential quagmire that is

dragging in the United States, you know, where is there in a situation where they can negotiate

with the Iranians that they do have ships transiting through the Hormuz, that's something that they

could still manage to transit through as we saw with Russian ships through the Red Sea when

the Houthis were launching a campaign of a smaller scale from 2023 to 2025. So the Russians

are definitely benefiting from this situation.

In some ways, Alison, should I be asking a different question, not only who wants the war to continue,

but does it really depend, and it sounds like from what you're saying particularly about the

Gulf States, does it really depend on the way in which the war ends? We've seen reports in the

Wall Street Journal this morning that some White House officials have been told by the president

that the war might end with the strait still closed.

Yeah, I think that's exactly right. It's a question of, you know, what the environment looks

like after the war ends, and, you know, what the new normal is. And I think that's the thing that's

really disturbing about this situation is, yes, Iran has suffered damages to their missile program,

to their Navy, to their leadership, and economically as well. But at the same time, they might come out

of this being able, or with greater leverage, because they, for the first time, really activated

their ability to close the strait of war moves. And so, you know, because that's what's driving,

you know, oil prices here at the pump in Washington to go up, global markets to get uneasy.

Those are the things that President Trump is most focused on, so you could see a situation where

this war ends, and we're primarily negotiating over the situation of the street,

and we're actually at a, you know, a lower bar for negotiations with the Iranians than we were

after the 12-day war. And that is former U.S. Middle East advisor, Alison Minor, who's now with

the Atlantic Council. And she raises again this idea of the war ending without the reopening

of the strait of war moves. This morning, Sally also spoke to the shadow treasurer, Tim Wilson,

and they covered supply chain issues, internally issues among the libs, but also these

concerns around the strait, and the latest comments from Donald Trump. Take a listen to Tim Wilson's

response. Of course, those comments concern, I think every Australian, because Australia depends

on oil that comes through Asia, but from the Middle East through Asia. And, you know, the,

we are all looking at this conflict with incredible concern about its trajectory, and the fact

that if you start something, you need to finish it. What if the U.S. ends this war without reopening

the strait? Well, that's a big hypothetical and that would have dramatic and substantial

consequences for Australia and for the global economy, which is the Australian government

as based on their public statements. We're not forewarned about this conflict. Of course,

there's enormous sympathy with the problems of a regime, a removing a regime that was involved

in exporting terrorism around the world, but we need to be extremely mindful that if you start

a conflict like this, the expectation, I think, of everybody is that you finish it,

and there will be huge downstream consequences for our economy, for our society, and not just us,

for global stability. Should Australia send any further military assets to the Middle East

for this conflict? Well, I don't have enough intelligence to give guidance on that, but my general

position is to be extremely cautious in doing so. I've been asked about this previously, and why

whether it's reasonable that the U.S. demands of us certain resources, my expectation is that

the U.S. government would have given us forewarning if that was their expectation. And so,

I'll defer to, of course, the Minister for Defence and the Shadow Minister for Defence,

but my caution is pretty clear. On the weekend, Andrew Hastie, your front bench shadow

colleagues, said he was open to gas-windfall tax, and that the Liberal Party needs to be open to

rethink on negative gearing and capital gains tax. What did you make of your colleague

freelancing in your portfolio? Look, people who are entitled to their views as enormous

challenges our country faces. We need big picture thinking. We have three budgets between now and

the next federal, or potentially three budgets, between now and next federal election, and at the

current rate that the government continues to stoke inflation and put more pressure on households,

then go on and tax that inflation. Their economic model is wrong, and we don't know what it is.

We're going to be left with, we have records, small business insolvencies in this country right now,

Australian small businesses, family businesses, and the self-employed are being pushed to the limits.

I'm interested in how we actually empower Australians to take control of their lives,

and we're hard work pays off. That must be our central focus to incentivise that type of behaviour.

So, do you agree with what Andrew Hastie was saying on Sunday, and is it helpful to have him

wandering around in your portfolio? Again, I'm going to focus on what it is we need to make sure

we're incentivising the right behaviour, encouraging and supporting small and family businesses

in the self-employed. We're not seeing that from the current government. You've outlined clearly

there your focus, and particularly on families and individuals who are trying to move forward

in difficult times. Yesterday, the opposition decided to change the subject and accused

Labour of a secret plan to increase the size of the parliament. It's not government policy,

it's an idea that's being considered. When there's so much going on in the economy,

was it something that needed to be raised this week? We simply asked a question about whether

that was the Prime Minister's intention. He seemingly has now ruled that out. He's read the T-Leaves

and that when households are doing it tough, when it would lead to about I think $600 million

of more expenditure and potentially even more tax risers, the Prime Minister seems to have ruled

that out because he understands that when you've got records, small business insolvencies,

when you've got massive problems of corruption, $15 billion a public money being hand to organise

crime through the CFMU Labour cartel, what Australians want is to see a government that's prudent

and responsible, not one that's seeking to enlarge its own members' parliament. The opposition leader

Angus Taylor even said that adding politicians to parliament would push up inflation,

is that something that's worrying you as the shadow treasurer? The thing that's worrying me about

inflation is that this government said this time last year that it had turned the corner. It clearly

has turned the corner, but in the wrong trajectory, it's going up and that's because we have had

and the Reserve Bank Governor identified this in her statements last year. The back end of last

year was the reason we've had interest rate hikes this year already. That means, unfortunately,

if there's interest rate hikes off the back of conflict in Iran, that is yet to follow through.

You know, where it obviously in very challenging times and the government's policy settings is

to run the economy down, not build a better future for Australia. Shadow treasurer Tim Wilson

there. Well, there's plenty to talk through for our political correspondent Tom Crowley.

Let him pick up where Tim Wilson left off on this discussion around the size of parliament.

Tim Wilson didn't sound all that enthusiastic to repeat the idea from Angus Taylor

and increasing the size of the parliament would push up inflation. I thought he just stepped

straight around that and made a broader point about inflation. It was exactly how Angus Taylor

chose to frame it in his very first question in question time yesterday. You're going to increase

the size of the parliament. You are going to spend $600 million and you are going to push up

inflation. Interesting that his shadow treasurer doesn't want to go there. This was a bit of a

thought bubble and idea from the coalition to shift the conversation away from the economy

and onto something quite different. It didn't go very well because the Prime Minister squished

it pretty much straight away. It's not a government policy. It's just something Donald Farrell has

been floating a balloon on. It was an easy thing for the Prime Minister to jump on. I didn't think

Tim Wilson really wanted to be talking about it either. Andrew Hastie, freelancing somewhat on

Sunday on insiders in economics, what did you make of Tim Wilson who's actually the shadow treasurer's

response to that? I think any time a politician uses the phrase that someone is entitled to their

view, you can read that they would rather that they had not expressed it in the way that they did.

I think there's some irony here because Tim Wilson and Andrew Hastie are seen as two of the

younger up-and-comers in the Liberal Party people who are generating ideas.

Tim Wilson was the moderate put into the shadow treasurer portfolio because he's got lots of ideas

and he likes to freelance and he always has on the economy. Now he's actually in the portfolio

and he can't. He's got to say I'm working on policy development. I'm working on ideas to do

with small businesses and he can't just shoot his mouth off. I think he sort of learnt that in the

first couple of weeks in the job that Andrew Hastie can. Over in the shadow industry portfolio,

freelancing to everyone's patches, I don't think the shadow cabinet will be too thrilled.

Out with Andrew Hastie, we understand he's had a gentle talking to from his leader this week

for the comments so that he made on insiders. But Hastie, his message is not really targeted at

his fellow front benches. It's targeted to a broader audience and it did seem to resonate. He's

able to speak with more freedom than it seems some of his colleagues are willing to.

Tom Crowley there. Ending today's episode of the Breakfast Wrap, which was produced by Teto

Thank you so much for listening. All those interviews presented by Sally Sarah were produced

by the Radio National Breakfast team. I'm Luke Sidham Dundin. We'll be back in your ears tomorrow

and if you want to listen to these interviews live as they go to where you can. On Radio National

and ABC Listen at 6 a.m., you can catch Radio National Breakfast live with Sally Sarah every single day.

Until then, see you tomorrow.