Global oil prices have already overshot the assumptions the Reserve Bank of Australia built into its most recent forecasts, a senior official has confirmed, in a sign that the Inflation battle may be getting harder rather than easier.

Speaking at the AFR Property Summit on 8 September 2026, Assistant Governor (Economic) Sarah Hunter said crude prices had risen sharply in a matter of weeks and now sat above the level the Bank had penciled in for its August Statement on Monetary Policy. The comment matters because petrol was already one of the strongest contributors to inflation in the latest official data, and because higher energy costs tend to ripple through the wider economy.

The development comes as the Reserve Bank holds the cash rate at 4.35 per cent and warns it may need to raise rates again if inflation risks build.

What the RBA Said

Ms Hunter was direct about the shift. Global oil prices, she said, "have tracked up quite sharply just in the last couple of weeks", adding that "they're certainly higher than what we had assumed in our August SMP".

That is a notable admission. The August Statement on Monetary Policy is the document that underpins the Bank's near-term inflation forecasts, and an oil price above its assumptions means, all else equal, that inflation could come in higher than the Bank projected.

The observation is consistent with the Board's formal decision on 11 August, when it noted that oil and other Commodity prices remained higher than before the conflict in the Middle East. The Board said at the time that inflation was still too high and that it would raise rates further if upside risks materialised.

The Key Numbers

Fuel rose 7.5% in July 2026, lifting transport inflation to 1.6%. Oil now exceeds the RBA's August SMP assumptions. Headline CPI: 3.5%; trimmed mean: 3.6%.

What Could Happen Next

The immediate question is whether the recent move in oil is sustained. Because Ms Hunter's comparison is against the August assumptions, a continued climb would widen the gap between reality and the Bank's forecasts, strengthening the case that inflation could prove stickier than projected.

Analysis of the Bank's public messaging suggests oil will feature prominently in the September deliberations. Ms Hunter said inflation was "top priority right now" and that the Board may have to raise rates if inflation looks stronger than forecast. The Board's own August wording committed it to acting on upside risks.

Markets are already leaning towards a hike, with roughly two-in-three odds priced for the 28 to 29 September meeting. Economists will be watching the next fuel and inflation readings to gauge how much of the oil move is passing through to the pump.

Conclusion

The Reserve Bank's acknowledgement that oil is running above its August assumptions is a small statement with large implications. It confirms that one of the key inputs to the inflation outlook has moved the wrong way, at a time when petrol is already among the biggest contributors to rising prices and underlying inflation sits near 3.5 per cent. With the Board on record that it will respond to upside risks, the recent surge in crude has raised the stakes ahead of the September meeting.