Published: March 2026  |  therapyinsights.com.au

When the United States and Israel launched military strikes against Iran on 28 February 2026, the immediate headlines focused on missiles, airspace closures, and diplomatic fallout. Within days, however, the economic shockwaves reached Australian petrol stations, supermarket shelves, and critically the healthcare sector that millions of vulnerable Australians depend on every day.

For NDIS providers, aged care operators, and allied health professionals across the country, this conflict is not a distant geopolitical abstraction. It is a direct threat to operational viability. Fuel prices have surged by roughly 50 cents per litre since the war began. Medical supply chains dependent on Gulf shipping routes face growing delays. And a workforce already stretched thin by years of chronic shortages is now contending with rising cost-of-living pressures that make recruitment even harder.

This article examines the Iran war impact on healthcare in Australia through the lens of NDIS service delivery and aged care operations. It provides a data-driven assessment of the risks and sets out practical strategies that providers can implement right now to protect participants, residents, and their own financial sustainability.

The Strait of Hormuz is the narrow waterway between Iran and Oman. It is the single most important oil transit chokepoint on the planet. In peacetime, approximately 20 million barrels of crude oil pass through it every day, representing roughly 20 per cent of global petroleum consumption and a quarter of all oil traded by sea.

Since the conflict began, commercial traffic through the Strait has dropped by an estimated 70 per cent. Iranian threats to fire on vessels attempting passage, combined with the withdrawal of maritime insurance coverage, have brought tanker movements to a near standstill. Brent crude prices surged from around US$70 per barrel before the war to over US$110 within days, a spike of more than 40 per cent.

For Australia, the consequences are amplified by a structural vulnerability that policymakers have been warned about for years: the nation imports roughly 90 per cent of its refined liquid fuel. Australia entered the crisis holding approximately 36 days of petrol, 34 days of diesel, and 32 days of jet fuel in reserve, this is technically the largest stockpile in 15 years, yet still non-compliant with International Energy Agency requirements. Average petrol prices have already risen from $1.69 to $2.19 per litre, with analysts warning they could climb toward $3.50 in a prolonged disruption scenario.

This is the starting point for understanding how a war thousands of kilometres away is now reshaping the cost structure of disability and aged care services across every state and territory.

Travel is fundamental to NDIS service delivery. Therapists drive to participants’ homes. Support workers accompany clients to medical appointments, community activities, and employment. Plan-managed participants already report that therapy travel costs drain their funding faster than expected, this is a concern the NDIA itself acknowledged in its 2025–26 Annual Pricing Review.

Under current pricing rules, providers can claim travel time at half the hourly therapy rate, and participants may be asked to contribute toward non-labour travel costs such as fuel. When petrol prices jump by 30 to 50 per cent in the space of a fortnight, these arrangements quickly become unsustainable. A psychologist travelling three hours each way to a regional client is now spending significantly more on fuel alone, while the NDIS price cap for that service remains unchanged.

The NDIS cost pressures of 2026 fall disproportionately on participants in rural and remote areas, these are communities that are already underserved. In these regions, therapists may travel hundreds of kilometres for a single session. The 40 per cent remote loading on NDIS prices, while helpful, was not designed to absorb a sudden oil-price shock of this magnitude.

Reports from regional Australia indicate that some service stations have already run dry—not because national supply has collapsed, but because panic buying has outpaced local resupply logistics. For NDIS providers operating in these areas, even temporary fuel shortages can force session cancellations that set back participants’ therapy progress by weeks.

When travel costs rise and plan funding stays fixed, something has to give. Providers face a difficult choice: absorb the additional costs and accept thinner margins, reduce the number of face-to-face sessions, or shift more services to telehealth. Each option carries consequences for participant outcomes.

Australia’s aged care sector was already navigating significant financial stress before the Iran conflict began. The war has now layered additional cost pressures onto a system with limited capacity to absorb them.

Diesel powers the trucks that deliver food to aged care facilities across the country. With diesel prices in many regional centres exceeding $2.25 per litre—up from around $1.75 before the conflict—freight surcharges are flowing through to procurement budgets. The National Farmers’ Federation has warned that food prices could rise by as much as 50 per cent if the disruption continues, a figure that would be devastating for facilities operating on fixed government subsidies.

Aged care facilities run 24 hours a day, seven days a week. Heating, cooling, laundry, and medical equipment all draw heavily on energy. While Australia’s domestic electricity grid is less directly exposed to the conflict than its liquid fuel supply, the broader inflationary pressure from rising oil prices feeds into energy costs over time. Facilities in states with higher gas dependency are particularly vulnerable.

Many aged care workers are among the lowest-paid in the healthcare sector. A 50-cent rise in petrol prices hits their household budgets hard, particularly for workers commuting to facilities in outer suburban or regional locations. Higher commuting costs increase the risk of staff turnover at the worst possible time, compounding an aged care crisis that Australia has been grappling with since long before this war.

The Strait of Hormuz is not only an oil corridor. It is a critical node in global shipping networks that carry pharmaceuticals, medical devices, continence products, mobility equipment, and the raw materials used to manufacture them. The effective closure of this route is forcing shipping companies to reroute around the Cape of Good Hope, adding weeks to delivery times and substantially increasing freight costs.

Australia relies heavily on imported medications, including many of the drugs commonly prescribed to NDIS participants and aged care residents. Even before the war, the Therapeutic Goods Administration maintained a list of medicines in shortage. Disruptions to Gulf shipping routes add another layer of fragility to a supply chain that was already stretched by post-pandemic demand.

Wheelchairs, prosthetics, communication devices, and other assistive technology products often involve components manufactured in Asia and Europe, with supply chains that pass through or near the conflict zone. Extended lead times and higher freight costs will likely translate into longer waits and higher prices for NDIS participants requiring new or replacement equipment.

Medical supply shortages from the war could extend delivery times for critical assistive technology by 4–8 weeks, based on current shipping rerouting estimates.

The NDIS and aged care sectors are heavily dependent on migrant workers, particularly from South and Southeast Asia. The war’s broader economic fallout—including airline disruptions, rising living costs, and potential changes to visa processing timelines—could slow the pipeline of international workers that Australian providers rely on to fill critical roles.

Domestically, rising cost-of-living pressures make it harder to attract and retain workers in a sector that already struggles with wages. Support workers earning $35–$50 per hour may reconsider roles that require significant driving, especially in regional areas where fuel costs consume a larger share of take-home pay. The compounding effect of fuel costs, grocery inflation, and stagnant NDIS price limits creates a workforce retention crisis layered on top of an existing recruitment shortage.

For providers, this means higher agency costs, more unfilled shifts, and growing pressure on existing staff—a cycle that directly affects participant and resident outcomes.

The structural tension at the heart of NDIS provider sustainability in 2026 is straightforward: costs are rising sharply while revenue is capped by government-set price limits.

The NDIA’s 2025–26 Annual Pricing Review delivered a 3.95 per cent increase to standard support prices—the largest in recent years, but calibrated against pre-war economic conditions. It did not, and could not, anticipate a 40-per-cent spike in global oil prices or the cascade of inflationary pressures that follow.

Providers operating in thin-margin environments—particularly small to mid-sized organisations in regional areas—face a genuine viability question. The gap between what the NDIS pays and what it actually costs to deliver services is widening in real time. Without an emergency pricing response or supplementary funding mechanism, some providers will be forced to reduce service hours, withdraw from unprofitable geographic areas, or exit the scheme entirely.

In aged care, the dynamic is similar. Facilities receiving fixed government subsidies cannot pass rising costs on to residents in the same way that a commercial business can adjust its prices. The result is margin erosion that threatens the quality and continuity of care.

If hostilities wind down quickly and the Strait of Hormuz reopens to commercial traffic within one to two months, the most severe impacts will be temporary. Fuel prices would likely retreat toward pre-war levels within several weeks of reopening, shipping routes would normalise, and supply chain backlogs would clear over the following quarter. In this scenario, providers face a difficult but manageable period of elevated costs, followed by gradual recovery.

A sustained conflict that keeps the Strait of Hormuz effectively closed for three months or more would represent a structural shift. Australian economists have warned that a three-month disruption could see petrol prices rise by an additional $1 per litre, CPI temporarily spike by around 1.5 percentage points, and GDP fall by 0.5 percentage points by the end of 2026. For the NDIS and aged care sectors, this scenario would likely trigger provider exits, service deserts in regional areas, and measurable deterioration in participant and resident outcomes.

The uncertainty surrounding this conflict makes proactive planning essential. Providers who act now will be better positioned to protect their participants, their workforce, and their financial sustainability regardless of how the situation unfolds.

Begin with a clear-eyed assessment of where rising fuel and supply costs are hitting hardest. Map your travel-dependent service lines. Calculate the actual per-session cost increase for mobile therapists and support workers. Identify which supply contracts have price escalation clauses and which leave you exposed.

Cluster appointments geographically to reduce total kilometres driven. Where clinically appropriate, blend face-to-face sessions with telehealth to maintain participant contact while reducing travel. Review vehicle fleet efficiency and consider whether transitioning to hybrid or electric vehicles is feasible for your organisation.

Do not rely on a single supplier for critical consumables or equipment. Build relationships with alternative vendors, prioritise Australian-manufactured products where available, and consider holding slightly larger buffer stocks of essential items to ride out potential delivery delays.

Recognise that your staff are feeling the same cost-of-living pressures as everyone else—often more acutely, given sector pay rates. Explore fuel subsidies, carpooling schemes, or travel allowances where financially possible. Flexible scheduling, professional development opportunities, and genuine recognition all contribute to retention without requiring large budget increases.

The 2026–27 NDIS Annual Pricing Review consultation is underway. Providers should submit evidence-based submissions documenting the real-world cost increases they are experiencing. Collective advocacy through peak bodies and provider networks amplifies the message to policymakers that pricing must respond to extraordinary economic conditions.

Understanding your true cost-per-service-hour is no longer optional—it is a survival skill. Tools like the NDIS Financial Clarity Calculator can help providers model different cost scenarios, identify break-even points, and make informed decisions about service mix and geographic coverage. In a period of rapid cost escalation, data-driven decision-making separates sustainable providers from those at risk of failure.

The US–Israel–Iran war has introduced a level of economic volatility that the Australian disability and aged care sectors are not structurally equipped to absorb without deliberate, proactive management. Fuel costs, supply chain disruptions, workforce pressures, and fixed government pricing create a compounding risk profile that grows more severe with each week the conflict continues.

The providers who will navigate this period most successfully are those who confront the financial reality early, adapt their operational models, advocate for fair pricing, and invest in the tools and systems needed to make sound decisions under uncertainty.

This is not a time for alarm. It is a time for strategic clarity.

Therapy Insights provides NDIS providers and aged care leaders with the financial tools, strategic analysis, and sector intelligence needed to operate sustainably in uncertain times. Visit Paradza.com access the NDIS Financial Clarity Calculator and explore our advisory resources.

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