Iran-US 'probably unlikely' to return to full hostilities - MFAT

Regardless of the uncertainties surrounding the Iran war and the US administration, New Zealand officials six months on are hopeful - confident, even - that supply chains will hold. In the second of a two-part series, RNZ political reporter Russell Palmer sits down with MFAT's Taha Macpherson.Unfortunately, responding to complex crises has become "part and parcel, and an increasing part" of the Ministry of Foreign Affairs and Trade's business.That's the view of deputy secretary Taha Macpherson, who points to crises in the Pacific, Ukraine, Gaza and more recently Nepal.He has led the ministry's policy group since 2024, and before that was acting deputy secretary for the Europe, the Middle East, Africa and Australia group.The global fuel crisis may have been sparked by a notoriously unpredictable US President Donald Trump and Israel attacking Iran in February, and although attacks in both directions have resumed since then, Macpherson seems cautiously optimistic."We would probably say ... both parties have incentives not to return to a full-scale conflict like we saw in the initial stages," he says."It's probably unlikely that we see a return to full-scale hostilities."He says Pakistan and Oman, which have facilitated talks, believe both sides feel that engagement is worthwhile - so long as a path to diplomatic resolution exists."With the caveat that it's very difficult to predict, what we may see is a sustained period of a new normal where you see increased tensions and maybe periodic flare-ups, probably around the Strait of Hormuz primarily."MFAT handles sensitive global diplomacy and rarely grants interviews; keen readers will note Macpherson's language is loaded with words like 'probably' and 'unlikely'.Concerns remain about the management of the Hormuz Strait and other key shipping routes being subject to Iran, Israeli or American influence, and Houthi attacks from Yemen and the Red Sea."You've got 12 to 15 percent of global oil trade going through the Red Sea and the Suez Canal so I think anything which led to ... major disruptions to those significant waterways would be of concern, because you are seeing potential supply impacts," Macpherson says."We've been very consistent since the outset of the conflict: we want to see de-escalation ... to see the parties return to a negotiated outcome ... the restoration of freedom of navigation."An all-of-government responseNew Zealand responded as soon as attacks on Iran began, setting up an all-of-government response group with 11 agencies, which were soon hosted in MFAT's new offices, which replaced a formerly earthquake-prone building."We'd only been here for about a week ... very, very helpful at the time. It was very lucky timing," Macpherson says.Treasury is leading the fuel price response, MBIE the supply response.MFAT also played a key role on international policy and diplomacy both at home and in embassies or 'posts' in the Middle East; in Southeast Asia, where more than 90 percent of New Zealand's fuel comes from; and with Pacific partners."Posts directly involved, right: we had Tehran, we had Abu Dhabi ... Riyadh, Cairo," Macpherson says."They're responding or assisting with the consular response, but also they're providing reporting on developments ... they're doing that at the same time as they're trying to make sure that they're safe, their families are safe."Some staff needed to move between embassies, or provide remote support."You can't keep the rhythm of this type of response going relentlessly over a sustained period."The efforts of Southeast Asian and other regional posts quickly became central. The ministry needed to know how other countries were responding, and "encouraged governments that were quite critical to us as partners in fuel supply chains ... not to take measures to introduce restrictions"."They very quickly became expert in advocating for our interests through this crisis ... we haven't seen big supply chain disruptions from our key Southeast Asian partners."The posts themselves would often then go in and engage with the host governments ... to ensure that our position - New Zealand's position and priorities - were understood," Macpherson says."They would facilitate contacts between our ministers and relevant ministers, and also facilitate engagement with the fuel suppliers."The government found that like New Zealand, Pacific countries at the end of supply chains relied on refined imports for 80 percent of total energy needs.Posts were "very, very quickly" working with them to understand what those partners were doing and they understood New Zealand's priorities, he says.Trade agreements were also key - particularly the so-called 'food for fuel' deal with Singapore."It sort of introduced between us and Singapore some binding commitments, which meant that countries agreed not to put restrictions on critical services or goods during a crisis like this."This is something that I think we'll continue to look at - whether or not that model can be used as a basis to help support our longer-term supply chain resilience."Leadership role for NZThe Future of Investment and Trade Partnership (FITP) group has received less attention. New Zealand, Singapore, Switzerland and the United Arab Emirates formed the grouping in September 2025 to curb trade barriers and maintain supply chains.Macpherson says New Zealand played a leadership role, and by July this year 19 member countries were attending the https://www.rnz.co.nz/news/business/724810/largest-trade-meeting-in-20-years-underway-in-auckland biggest trade meeting New Zealand had hosted in 20 years].MFAT, MBIE and NZ Trade and Enterprise also hosted webinars to brief businesses as the crisis went on."Some of these would have 800 participants on screen and we did them on quite a regular sort of tempo ... bigger businesses, smaller businesses, they were quite open," Macpherson says.The crisis has also led MFAT to begin building a "crisis cadre", training 55 staff as "surge capacity" for future crises, he says."Things will stabilise somewhat, but some of these challenges are still out there and still uncertain."This work hasn't ended."RNZ has also spoken to the Ministry of Business, Innovation and Employment about the risks of a supply shock from the conflict. The Treasury refused requests for comment on the fuel price response.