Iran and the United States have ended their fragile peace agreement, signed only a month ago, with the exchange of missile fire.

Once again, this halts the flow of oil and gas through the Strait of Hormuz and puts major oil importers like Australia on tenterhooks. And this time could be worse than before.

Ukraine’s drone attacks on Russian refineries have forced Russia to halt its diesel exports, cause the price of diesel to soar.

The combination of these two events will tighten supplies of diesel. Australia is the world’s largest importer of diesel, which we use to power long-range freight, mining and agriculture.

Cost of shipping oil to rise

This resumption of hostilities appears to be a battle over the control of shipping through the Strait of Hormuz. Tehran has fired missiles at ships navigating the strategic waterway near Oman’s coast, instead of through Iran’s preferred channel near its own coast, where it can collect a shipping fee.

The US has responded by proposing a 20% fee on the value of cargo for each ship passing through the strait.

For an oil tanker such as a Very Large Crude Carrier (VLCC) carrying two million barrels of oil at US$80(A$115) a........

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