Fuel shortages stoke food supply fears

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US. Treasury Secretary Scott Bessent has announced a series of measures which he says will cause the economic asphyxiation of Iran, including going after other countries that do trade with the Middle East power. But with no end in sight to the ongoing global energy crisis, a wave of secondary food shortages are cresting on the horizon. So how vulnerable is Australia?
Welcome to ABC Business Daily.

**Ian Verrender** (1:06)
And I'm Ian Verrender, the ABC's Chief Business Correspondent.

**Carrington Clarke** (1:09)
Ian, I want to get your take on what we've kind of witnessed today. So there was a lot of lead up to Scott Bessent, the US. Treasury Secretary's announcement. We were talking about D-Day for Iran, that they were going to be marshalling the troops ready to invade. They've obviously basically given up on military power being enough to push Iran into reopening the Strait of Hormuz, or giving up effectively. So they're now trying to tighten the economic noose. This economic asphyxiation I thought was particularly visceral kind of language.
But what they've put out today was that they're going after 60 individuals, entities, vessels, they've named them. A lot of them seem to be pretty low level to me. These are individuals, entities, that do trade with Iran when it comes to oil. They're also talking about digital currencies, technology, etc.
And the suggestion is from Scott Bessent that Donald Trump is personally calling the leaders of individual countries to lay out timelines under which they need to stop doing business with Iran. They want Iran completely isolated from the rest of the global economy. And they say that will put the pressure on them to change the position. But when he was pressed, Scott Bessent did not seem to want to engage in whether or not China was one of those countries that was being pressed and what economic coercion or what type of coercion generally America could use against them. What did you make of it? Did it feel like an economic D-Day to you? Is this really going to strangle Iran's economy?

**Ian Verrender** (2:44)
Well hyperbole comes fairly easily to the US leadership these days. I mean, forgive me for saying so, but I thought Iran had been obliterated several times. I thought they didn't have a Navy or any kind of armed forces, and yet the Strait of Hormuz remains shut. And still, they managed to inflict damage on civilian and military targets throughout the Gulf and even US operations. So America, as you said correctly, has failed in its military bid to try and isolate Iran. And now they're going down this path, which they probably should have tried to start with. But let's put this in.

**Carrington Clarke** (3:26)
But they have been tried. Well, exactly. The issue is, right, there's decades of sanctions against Iran. It's basically been cut off for trade for most of America's allies for an extended period.
Is there anything really extra they can do if they can't get China to join in the action?

**Ian Verrender** (3:40)
Well, there's no way that China will join in the action, because China needs oil. It's done a very good job of trying to basically go down the path of renewables, but it still needs oil. It does not want to be beholden to the West for oil suppliers. So it's not going to abandon Iran and then switch to using American oil.
What happens if there's some kind of conflict? Does Xi ring up Donald Trump and say, can we still have the oil? I don't think so. So they are going to continue doing trade with Iran. There is no way in the world they will stop that. And everybody knows that.
And whenever you put in place these kind of sanctions, there are always workarounds. There's another country that will buy something or other and store it, then on sell it. It's easy to do and we've seen it happen time and time again when it comes to sanctions. They tend to have a fairly immediate impact, but then after a while, it tends to, things get very blurry. The only thing that's really worked, I think, with Iran and which really they are obviously still extremely upset about is the fact that there's so much of their wealth that has actually been, which they had in the global financial system, which has been essentially, you know, shutted away.