Iran news and live updates: RBA says ‘supply shock’ could spike inflation as US military upgrade death toll

Australia is considering contingencies on how to bring home tens of thousands of citizens stranded in the Middle East as the US-Israel war on Iran widens.

There are about 115,000 Australians in the region, with most unable to leave due to the closure of air spaces as a result of the conflict.

US and Israeli air strikes launched on Iran killed its leader Ayatollah Ali Khamenei and dozens of senior officials.

Defence Minister Richard Marles described the situation as a “very significant consular challenge”.

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The Strait of Hormuz is closed and Iran will fire on any ship trying to pass, an Iranian Revolutionary Guards senior official says.

It’s Iran’s most explicit warning since telling ships it was closing the export route on Saturday, a move that threatens to choke a fifth of global oil flows and send crude prices sharply higher AAP reports.

“The strait (of Hormuz) is closed. If anyone tries to pass, the heroes of the Revolutionary Guards and the regular navy will set those ships ablaze,” Ebrahim Jabari, a senior adviser to the Guards commander-in-chief, said in remarks carried by state media on Monday.

The strait is the world’s most vital oil export route, which connects the biggest Gulf oil producers, such as Saudi Arabia, Iran, Iraq and the United Arab Emirates, with the Gulf of Oman and the Arabian Sea.

Defence Minister Richard Marles has confirmed a large airbase used by the Australian military was struck by Iran over the weekend.

A military source told The Nightly that the Al Minhad airbase outside Dubai received “multiple impacts” from suspected ballistic weapons.

Mr Marles confirmed on Tuesday that the airbase was hit, adding that all Australian military personnel are safe and accounted for.

“I can confirm both of those things. And so there was some drones which did attack that base on the first night, I think,” he told Sunrise.

“We have a number of Australians who operate from a headquarters that we’ve had at Al Minhad now for many, many years - it’s just outside of Dubai, about half an hour outside of Dubai.

“They are all accounted for, they are all safe. We’ve got north of 100 serving personnel actually across the Middle East in a range of countries, but most are in the UAE and that base is very important for us. But they are all safe and accounted for.”

The US Central Command (Centcom) has updated the death toll for service members to six.

A statment released on Monday says US forces discovered “two previously unaccounted for service members from a facility that was struck during Iran’s initial attacks in the region”.

“Major combat operations continue,” the update added.

Reserve Bank Governor Michele Bullock has suggested the Middle East conflict could worsen Australia’s inflation problems.

“The past few days have seen a significant escalation in conflict and instability in the Middle East, which is deeply concerning,” she told a business summit in Sydney.

“A supply shock could, for example, add to inflation pressures. And the potential implications for inflation expectations are something we are very alert to.”

Crude oil prices soared by double-digit figures on Sunday after US and Israeli air strikes on Iran killed Ayatollah Ali Khamenei, with the West Texas Intermediate price hitting an eight-month high of $US72 a barrel on Monday.

Australian motorists were already paying $2 a litre for unleaded before the air strikes so an escalation in the conflict could push prices even higher, with economists equating every $US10 increase in crude oil to a 10-cent-a-litre price at the bowser.

Ms Bullock said a global slowdown because of a Middle East could also have the opposite effect on inflation.

“But at the same time, a prolonged impact on energy markets could have adverse effects on global economic activity and result in downward pressure on inflation,” she said. “It is not obvious how this might play out.”

US President Donald Trump says the US and Israel could not wait any longer before striking Iran.

“Everybody was behind us,” Mr Trump explained in the US when asked about the timing for the strikes.

Iran achieving their nuclear weapons goals has been decribed as an “intolerable threat” to the Middle East by Mr Trump.

The attack on Iran was “our last, best chance to strike” and to eliminate the “intolerable threats posed by this sick and sinister regime”, Mr Trump added.

US officials have confirmed their embassy in Kuwait has been hit by a missile.

The US state department said the missile was a suspected Iranian drone that had struck the embassy causing damage and a fire.

A statement published by The Washington Post says “there is a continuing threat of missile and UAV attacks over Kuwait.”

The state department messaging added there had been no casualties but warned people they should ”not come to the embassy.”