The headlines are a gift to lazy analysts. "Global Gas Prices Spike on Middle East Tension." "Australian Households Bracing for Iran Conflict Fallout." It is a convenient narrative that lets domestic policy failures off the hook by blaming a boogeyman five thousand miles away.
But it is a lie.
If your electricity and gas bills hit a record high this winter, do not look at Tehran. Look at Canberra, Brisbane, and the boardrooms of Sydney. Australia is the world’s largest exporter of Liquified Natural Gas (LNG). We are literally floating on a sea of methane. The idea that a skirmish in the Strait of Hormuz should price an Australian retiree out of heating their home in Melbourne is not a market necessity. It is a structural choice.
The Global Price Trap is a Policy Feature
The "lazy consensus" argues that because gas is a global commodity, Australian prices must track the Asian or European benchmarks. If Iran shuts the taps, the global supply drops, the price of the Japan-Korea Marker (JKM) goes up, and therefore, Australian prices must follow.
This logic is flawed because it ignores the physical reality of the infrastructure. Most of Australia’s gas is produced in the north and west, far from the population centers of the southeast. More importantly, we have tied our domestic price to the "Netback" price—the price an exporter gets for selling gas overseas minus the cost of liquefaction and shipping.
When global tension rises, the Netback price rockets. Australian retailers then charge domestic users that same inflated global price. We are essentially forcing Australian citizens to outbid the entire world for their own resources.
I have watched energy traders rake in windfall profits during "supply crunches" that never actually resulted in a physical shortage of gas on Australian soil. The gas was there. The molecules didn't vanish. The price just shifted because the contract allowed it to.
The Myth of the Supply Shortage
Listen to any industry lobbyist and they will tell you the solution is more drilling. "We need to unlock more supply to drive prices down," they claim.
This is a classic bait-and-switch. In the last decade, Australia’s gas production has tripled. During that same period, domestic prices doubled or tripled.
Why? Because every new molecule of gas pulled out of the ground is prioritized for the export market. Unless there is a strict, enforceable domestic reservation policy—like the one Western Australia uses to keep its prices significantly lower than the rest of the country—new supply just means more profit for exporters, not lower bills for you.
Western Australia mandates that 15% of gas produced for export must be reserved for the local market. The result? While the East Coast was panicking over $20/GJ (gigajoule) prices, WA was sitting comfortably at $5/GJ to $8/GJ.
The "conflict in Iran" narrative is a smokescreen. It allows the industry to maintain a high-price environment under the guise of "geopolitical risk" while avoiding the conversation about why the East Coast lacks the same common-sense protections as the West.
Why the Energy Transition Isn't Saving You Yet
The second popular myth is that the transition to renewables is the primary driver of current bill spikes. The contrarian truth is more annoying: the transition is being managed so poorly that we are paying for two systems at once while getting the benefits of neither.
We are maintaining a decaying fleet of coal-fired power plants that are increasingly prone to "unplanned outages." When a coal unit trips in the middle of a cold snap, the grid operator has to call on gas-fired "peakers" to fill the gap instantly.
These gas peakers are the most expensive form of generation. Because we have linked our gas prices to the global market, we are essentially burning "gold-plated" gas to keep the lights on every time an old coal plant fails.
The volatility isn't caused by the wind not blowing; it's caused by our total exposure to a global gas market we have no business being subservient to.
Dismantling the People Also Ask Queries
Will my energy bill go up if Iran goes to war?
Only because your government allows it. Australia has enough gas to power itself several times over. If your bill goes up, it’s because of a "price parity" mechanism that favors multinational exporters over local residents.
Is there a gas shortage in Australia?
No. There is a shortage of cheap gas available to the domestic market because the majority of it is already contracted to buyers in China, Japan, and Korea. We are an energy superpower that acts like an energy vassal state.
Should I switch to all-electric to avoid gas price hikes?
Yes, but not for the reasons the activists tell you. You should switch because gas retailers have demonstrated that they will always prioritize the highest bidder on the global stage. Going electric allows you to bypass the gas export cartel entirely, especially if you have solar.
The Cowardice of the "Price Cap"
In late 2022, the Australian government introduced a temporary price cap on gas. The industry wailed. They claimed it would "stifle investment" and lead to blackouts.
It didn't.
What it did do was show how arbitrary the pricing actually is. The cap was set at $12/GJ—still roughly double the historical average—and the companies still made massive profits. The fear-mongering about investment is a standard lobbying tactic. Capital does not flee a profitable market; it only flees a market where it can't extract excessive rents.
The real risk isn't an Iranian missile; it's the political inability to decouple domestic necessities from global speculation.
The Hard Truth About Your Bill
If you want to know the "controversial truth," here it is: high energy prices in Australia are a choice.
We choose to let gas companies export our resources for free or near-zero royalties in some jurisdictions. We choose to allow the "Netback" pricing model to dictate what a baker in Sydney pays for an oven. We choose to ignore the Western Australian model because the lobbying pressure from the export giants is too immense for the East Coast political class to handle.
Blaming Iran is easy. It requires no policy changes. It requires no difficult conversations with CEOs. It just requires a map and a scary headline.
Stop looking at the Middle East. Start looking at the export terminals in Gladstone. That is where your money is going.
The next time you see a report about "global pressures" pushing up your utility costs, remember that you are standing on the very resource being blamed for your poverty. A country with our wealth of gas and sun should have the cheapest energy in the world. The fact that we don't is not a tragedy of geography—it is a triumph of corporate interests over the public good.
Stop paying for the narrative. Demand a reservation. Demand a decoupling. Or keep shivering while the tankers sail past your coast.
