Assumptions, not reality: Australia’s Indian Ocean challenge
What is the cost of getting the Indian Ocean wrong?
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Dr Iain MacGillivray
Senior Research Fellow: International Affairs and Defence Strategy, Perth USAsia Centre
26 May 2026
Join the Perth USAsia Centre in the lead‑up to the Indian Ocean Defence and Security (IODS) Conference for a new op‑ed series, Broadening Australia’s strategic focus in an Indian Ocean century. This series examines Australia’s shifting security environment and why Australia cannot afford to under‑prioritise the Indian Ocean. With Western Australia at the heart of this engagement, our experts will explore why expanding our strategic focus is a necessity for our nation’s future.
In the final article in the series, Dr Iain MacGillivray explores why the Indian Ocean is critical to Australia’s security, and why WA is emerging as the strategic hub for Australia’s Indian Ocean approach.
Key takeaways
The conflict in Iran and the crisis in the Strait of Hormuz highlight the dangers of hubris and overly optimistic assumptions in geopolitics and warfare. Actions taken by the US and Israel against Iran expose human limitations, increasing costs of escalation, and show that strategic plans do not ensure success, especially against a well-equipped and ideologically charged enemy. Moreover, the mistaken belief that maritime access will always be granted is a lesson worth exploring. The conflict demonstrates a pattern that is historically legible: chokepoint coercion as strategic signalling, coalition fracture under pressure, threshold ambiguity as a tool of coercion. Hormuz is not the end of the argument. It’s the beginning. A sophisticated adversary is already drawing lessons.
Hormuz is not the end of the argument. It’s the beginning. A sophisticated adversary is already drawing lessons.
For Australia, this is not a distant crisis about capabilities. It is a pivotal diagnostic moment. Hormuz is the only passage for oil from the Gulf to the Indian Ocean and has made clear that maritime access, particularly Indian Ocean stability, is not a given. Australian defence strategy (see the NDS24 and NDS26) remains underpinned by a Pacific-first assumption – that the next crisis will likely unfold in that specific theatre, and defence investment is prioritised on this basis. Additionally, as their priorities evolve, it can be expected that the US will focus on the Pacific region and on its rivalry with China. Australian defence, however, has also made a huge bet that the Indian Ocean will remain stable long enough for it to build its relevant Pacific-focused architecture. Hormuz proves that theory wrong.
So, I ask: what is the cost of getting the Indian Ocean wrong?
Indian Ocean stability is not a given
Australia’s economic success is linked to the Indian Ocean, but the NDS26 presents it as a territory to defend, rather than as a strategic region that needs better understanding. It recognises trade routes and sea lines but overlooks the real costs of their disruption. Chinese grey-zone actions are expected to grow in this area, especially after Hormuz, as China seeks to protect its trade from East Africa to the Malayan Peninsula. A continuous grey-zone campaign – ambiguous enough to prevent alliance activation yet persistent enough to influence investments and energy links – can achieve strategic goals without armed conflict. As the post-Cold War order declines, the danger of misjudging the stability of the Indian Ocean is not military defeat but an economic crisis that will occur below the threshold for escalation, beyond Australia’s control, and before the intended strategic architecture is in place that can stop it.
[T]he danger of misjudging the stability of the Indian Ocean is not military defeat but an economic crisis that will occur below the threshold for escalation
Western Australia: a tale of two opposing strategic visions
Western Australia (WA) is where two conflicting strategic ideas converge – one focused on alliance interoperability to deter China and build denial capabilities, the other on maintaining access, shaping regional dynamics, protecting economic sea routes, and engaging partners outside formal alliances. WA finds itself uncomfortably on the edge of existing alliance architecture, facing a threat that these architectures are not set up to engage with. WA is also the only place on the Australian continent that lies near archipelagic chokepoints that control the flow of energy and commodities, and faces the Indian Ocean, where these energy flows originate.
The development of AUKUS submarine infrastructure, the rotational presence of UK and US submarines, and the workforce pipeline currently being established are significant strategic investments. While the Indo-Pacific is the strategic concept that recognises the Indian Ocean, it has unfortunately been neglected. The strategic importance of WA has thus been under-conceptualised. There is a strategic ‘why’, and current investment demonstrates this. However, the strategic purpose has not been sufficiently well-articulated or comprehensive enough to address the challenges Australia will face in the Indian Ocean. Without clarifying this purpose, WA currently provides neither effective deterrence nor credible denial.
A ‘location’ vs a ‘strategic position’
Canberra policymakers have under-recognised and under-articulated the strategic purpose of WA, particularly given the strategic theatre it faces and its place in the strategic calculus of what appears to be a Pacific-focused deterrence-by-denial strategy. WA is still treated as a ‘location’ – a place to build or base things – instead of a strategic hub from which Australia shapes and acts in the Indian Ocean. The narrative should move from simply calling it a location to framing it as a strategic position, or even a broader strategic concept.
The narrative should move from simply calling [Western Australia] a location to framing it as a strategic position, or even a broader strategic concept.
The sea lanes in our northwestern approaches are vital arteries for Western Australia’s economy; any disruption here could cause problems beyond anything Australia has yet faced. The northwest shelf areas – home to LNG facilities in Onslow and Karratha, and to port facilities in Port Hedland for iron ore exports – represent not just economic ventures but also strategic vulnerabilities. Any sustained disruption is not just a defence problem but an economic crisis that no submarine or alliance can resolve.
Disruption in the Indian Ocean – the bigger threat to regional stability
The risk need not be direct, such as a China-India maritime clash, but could be sustained ambiguity through grey-zone activities that are below the threshold for alliance activation and too high for Australia and its capabilities to resolve on its own. But sustained grey-zone activity, if prolonged, will influence investment decisions and reshape economic and bilateral energy relationships once thought secure. As Hormuz illustrates, Canberra’s planners must recognise that this contingency is a genuine possibility before AUKUS and defence investments are finalised. Western Australia will fundamentally play a crucial role in preventing a regional crisis in the Indian Ocean from spreading downstream.
Western Australia will fundamentally play a crucial role in preventing a regional crisis in the Indian Ocean from spreading downstream.
WA as the anchor in India-Australia relations
Australia’s relationship with India will be important to its future in the Indian Ocean, but it operates on a different logic than outlined in the NDS. It requires a partnership between two powers with shared exposure as co-inhabitants of the same strategic space. The relationship remains somewhat immature, given ongoing structural factors, but there has been some progress on shared interests in the Indian Ocean. Overall, these developments are positive. Currently, it is focused on high-level politics, but for strategic significance and to address future Indian Ocean challenges, requires deeper bureaucratic and geographical integration, not just political signalling. To deepen this relationship, Australia should focus on a clear strategic script for the Indian Ocean that is well explained and a story emphasising ‘how we can succeed’ in strengthening the Australia-India relationship. Western Australia is crucial to this vision. With its naval capabilities and growing defence facilities, WA can act as the anchor, turning diplomatic goodwill into a comprehensive strategic partnership.
Meeting the challenge: developing a strategic script for WA
Australia’s challenge in the Indian Ocean is an issue not only of capability, but also in concept. Australia’s current strategic framework treats the region as secondary – where issues in the Indian Ocean are managed rather than fully understood or thoughtfully integrated. However, geopolitics does not work to timelines and rarely follows the best-made plans. This is where WA can play a definitive role. Western Australia, therefore, requires more than just investment and infrastructure; it needs a strategic script – a clear statement of its strategic purpose, the strategic theatre it inhabits, what Australia intends to do from there, and adequate resources to make it happen.
What is the cost of getting the Indian Ocean wrong?
The danger of neglecting the Indian Ocean is that a crisis there will not come with a loud bang but with a whimper. The likely scenario is that it will emerge gradually, through declining investment, disruptions to energy security, and diminished economic ties. The crisis in the Strait of Hormuz is not a warning – it is a demonstration.
The crisis in the Strait of Hormuz is not a warning – it is a demonstration.
It is unlikely geopolitical events will remain quiet for long, particularly if and when Hormuz comes to an end. Australia’s reliance on the stability of the Indian Ocean and its presumption that infrastructure and AUKUS will mature in time is a strategic gamble Australia has not formally acknowledged. WA is central to Australia’s plans in the Indian Ocean, not simply as a location, but as a strategic position and strategic concept with a defined script, adequate investment, and clear national purpose.
Acknowledgments
The Perth USAsia Centre’s affiliation with Dr Iain MacGillivray is part of a collaboration with RAND Australia.
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