'Uncertainty' to reign in 2025 geopolitical outlook

Donald Trump's foreign diplomacy tends to be erratic and based on relationships, an academic says. (Mick Tsikas/AAP PHOTOS)

As holidaying Australians switch off and welcome in the new year, a potentially treacherous 12 months of geopolitical events could await their return. 

From precarious, ongoing violence in the Middle East and Ukraine to rising tensions in the South China Sea, just how Australians will be impacted remains to be seen. 

International relations senior lecturer at Flinders University, Jessica Genauer, said "one theme that will characterise 2025 in terms of world conflict is uncertainty".

Destroyed Gaza building (file)
Jessica Genauer said we don't know how ongoing conflicts will continue to play out in 2025.

"We've seen ongoing conflicts this year and at this point in time, we just don't know how those are going to continue to play out in 2025," she told AAP.

"This is in terms of both the ramifications will be and whether or not new conflicts might crop up."

Dr Genauer said Donald Trump's impending second term as US president will dictate just how many major events will transpire, which brings "its own kind of uncertainty".

"We're going to need to watch as well certain key actors," she said. 

"The main thing to say about Trump is that his behaviour in foreign diplomacy does tend to be relatively erratic and based quite strongly on how he perceives personal relationships with other political counterparts."

Dr Genauer also flagged Iran's position as a "greatly weakened regional power" as concerning.

"Trump has spoken quite strongly against Iran, which actually concerns me that under a Trump presidency, we might see behaviour from Israel that could lead to further escalation in the region," she said.

Petrol pumps
If world conflicts escalate Australians may be affected by more inflation and rising petrol prices.

Australians' biggest impact of global plates shifting will likely be around the economic impact, Dr Genauer said. 

"If conflicts do escalate around the world, particularly from countries that are important oil or gas exporting nations, we will see inflation rise and this, as it already has, will see the rise of things like the price of petrol rise," she said.

"Those are primarily the effects that we're going to feel as Australians."

Since the war in Ukraine broke out in early 2022, Australia's rate of inflation has surged with the cash rate sitting at 4.35 per cent.

In October, federal Treasurer Jim Chalmers said a spike in oil prices caused by Middle East conflict would be passed on to drivers at the bowser.

After easing over the previous 12 months, Brent crude oil price was at the time trading around $US77 a barrel, roughly seven per cent higher.

Treasury's rough rule of thumb was that every 10 per cent increase in the oil price sustained over the course of a year shaves 0.1 per cent off Australia's gross domestic product and adds about 0.4 percentage points to inflation.

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