Topics: Iran war, Closure of the Strait of Hormuz, Trump’s speech, fuel shortage

STEVE PRICE: Let's deep dive further into exactly what this update from the US President means for the region and the world. Senator Dave Sharma was Australia's Ambassador to Israel and knows the region as well as anyone. Senator, welcome. Funny, I think people were expecting something a little more defining from President Trump, but as we know, he is a master negotiator. What do you think he's up to?

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DAVE SHARMA: Look, I think part of his message was to reassure and communicate directly to the American public. I mean, I think bear in mind they were taken by surprise, I think, by the start of this conflict. He made a brief statement when hostilities got underway a little over a month ago, but he hasn't really sat down and in detail explained the rationale for this conflict to his own people. And I think this was an opportunity to do that. I think it was also an opportunity to reassure financial and energy markets that the conflict has a limited life. But I think it was also designed to communicate to the Iranian regime that, one, the US remains committed to ensuring they can never get a nuclear weapon. And Trump foreshadowed that he would come back if need be. And two, by taking away some of that leverage over the Strait of Hormuz that the Iranians have been exerting, by saying— Trump effectively saying, look, it's not— it's not my problem. I think he's attempting to get a little more leverage with the Iranians in these diplomatic negotiations that are underway.

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STEVE PRICE: Senator, talk to me about the Straits of Hormuz. I mean, I want to play just again his remarks about those who use it for oil deliveries, including ourselves, of course, and our Asian partners who refine all of our petrol, diesel, and avgas. Here's what he said about what they should do.

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[CLIP STARTS]

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PRESIDENT TRUMP: The countries of the world that do receive oil through the Hormuz Strait must take care of that passage. They must cherish it, build up some delayed courage. Should have done it before, should have done it with us as we asked. Go to the Strait and just take it.

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[CLIP ENDS]

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STEVE PRICE: Senator, I was just watching with Andrew Bold, a former US admiral, talking about if the coalition has to go into the Hormuz Strait and clear it of mines, and without American assistance, it's a 6, 7, 8-week-long process. going to leave us That's in a very grim position, isn't it?

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DAVE SHARMA: Look, it will, obviously. Look, you know, we all know these figures now. 17 to 20% of the world's seaborne crude oil and LNG comes out and through the Strait of Hormuz. The countries with the biggest interest in getting this open are the countries on the landward side of the Strait of Hormuz, if you like. That's Saudi Arabia, Kuwait, Iraq, the UAE, and Iran as well. They're the ones— and Bahrain— they export their oil through the Strait of Hormuz to world markets and their gas. So they're the countries with the biggest interest in getting this open. They will want to see it open, whether that is achieved militarily or I think in more likelihood, it's likely to be achieved diplomatically remains to be seen. But just quite what that diplomatic settlement looks like, I think we need to wait for further details. I notice Australia is participating in a meeting today, UK time, with other countries who have the same interest we do to see the Strait of Hormuz reopening. I'm keen to see what comes out of that one later today.

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STEVE PRICE: Going back to your diplomat times, I mean, it would have been common conversation, I would have thought, whenever conflict in the Middle East came up, that that was a major pinch point that could cause major global economic damage if it was shut.

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DAVE SHARMA: Yeah, look, certainly in the Middle East, everyone knows the Bab-el-Mandeb, which is the strait that leads into the Red Sea, and then the Strait of Hormuz, which leads into the Gulf. Everyone knew and knows that these are two critical choke points for the region, just like the Malacca Strait is in our region, or the Taiwan Strait, you know, key international waterways through which a huge amount of energy and traffic flows. And look, anyone who was ever gaming out any sort of conflict or increase in hostilities in the region would always be factoring in what would Iran do, what could Iran do to interrupt commercial shipping in the Strait of Hormuz. And that's— this has been a war game in action now.

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STEVE PRICE: As you said, this speech was largely directed at the American public and to his MAGA base. I mean, there were not a lot of mentions of Israel. So I suppose he's trying to, in a sense, distance himself a little bit from this idea that he's doing the bidding of Benjamin Netanyahu?

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DAVE SHARMA: Look, I think obviously the United States and Israel share an objective here, but it's effectively two countries with a shared objective operating in support of a shared goal. But they do have quite different interests here. And I think they also have quite different political constituencies. In Israel, this war is overwhelmingly popular. In the United States, it's not, you know, the United States, because of its financial and economic centre, is much more susceptible to and responsible to global financial and economic markets. Israel is a small economy that is not particularly sensitive to global oil prices. So I think they've got different political and strategic lenses through which they're approaching this conflict. I wouldn't expect that if the US ceases its operations, that Israel would continue for much longer. But I would say that the clock that's ticking in Tel Aviv is ticking more slowly than it is in Washington.

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STEVE PRICE: We all sat back last night waiting for the Prime Minister to deliver his 7 PM Australian Eastern Summer Time speech. It lasted 3 minutes and a bit. I think we were pretty underwhelmed. Were you expecting that there would be something more substantial out of that chat with the nation?

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DAVE SHARMA: Absolutely. I mean, I'm not the only person who said this, but it could have been a statement to Parliament, could have been an answer to a question in Question Time, it could have been a press conference. But to be geared up for a 7 PM primetime address to the nation, which is not a common thing in Australian political annals, I think people expected something considerably more substantial, not just clearing up misinformation and wishing everyone a good Easter. I think people were entitled to know what steps is the government taking now in the immediate term, but also what plans does it have for the medium and longer term to make sure that our energy security and energy resilience is not as vulnerable as it has been proven to be throughout this crisis?

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STEVE PRICE: And you're an observer of world events. I mean, if the Chinese were to decide to, to enact what they would like to do, and that is take over Taiwan, I mean, all of our fuel is coming through the South China Sea and, you know, some of it from Singapore, but those shipping lanes could be shut down very, very quickly. And all of those Asian customers that we have where we buy our refined petrol from, it's just going to disappear. That would make this look quite minor.

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DAVE SHARMA: That would immediately affect us because the Strait of Hormuz affects us through an indirect way, the passage of oil to Southeast Asia refineries from which we get ours. But if our own sea lanes have and trading lanes are interrupted, that would be, that would be massive. And Australia as a country is highly dependent on liquid fuels and we're highly dependent on imported liquid fuels. And I think after what we've seen the world go through over the last 5 or 6 years, I don't think we can make the same assumptions about the maintenance of those supply chains that we would have done in the 1990s or the early 2000s. It's a different world. Australia needs to have a different energy security posture.

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STEVE PRICE: Yeah, well said. Absolutely. Thank you very much for your time, Senator.

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[ENDS]