Labor warns of doomsday scenario if Middle East conflict persists

The Albanese government warned of a doomsday inflation scenario if the Middle East conflict persists, potentially causing significant pain for households. The 2026-27 budget modeled a scenario where oil prices peak at $200 per barrel and unemployment rises to pre-pandemic levels. This reflects concerns about disruptions to the global economy due to the conflict and potential closure of the Strait of Hormuz.