The Financial Post reports in its Wednesday edition that Australia's government conducted scenario analysis in its annual budget under which the war in Iran intensifies, driving oil to $200 (U.S.) a barrel and throwing the global economy into chaos. A Bloomberg dispatch to the Post reports that the Treasury said in Tuesday's budget papers, "This could occur if the conflict is protracted or if an escalation further damages energy and export infrastructure across the Middle East and shuts off oil supply from the region." Oil prices at that level in the July-to-September period would drive the Australian economy into contraction and push domestic inflation to 7.25 per cent in the year through the fourth quarter, with unemployment also moving higher. Brent crude finish above $106 (U.S.) a barrel on Tuesday. Higher prices for fuel, fertilizer and other petrochemicals would make some businesses unviable and hit the margins of others, the Treasury said. "We're hostage to developments in lots of ways," Treasurer Jim Chalmers told reporters Tuesday. "The impacts of the war in the Middle East are already serious. There is still a risk that they become quite severe and we've tried to give you a sense of that severity."