Australia had an inflation problem before the Iran war, but it's turned sinister.Prior to the war, core inflation — which the Reserve Bank of Australia (RBA) focuses on in its interest rate decisions — was well above 3 per cent.But the RBA wants inflation to be at or around 2.5 per cent.Enter the Iran war, an effective closure of the Strait of Hormuz and a major oil price spike, and headline monthly inflation has surged to 4.6 per cent."Higher fuel prices are adding to inflation, and there are indications that this is likely to have second-round effects on prices for goods and services more broadly," the RBA's Monetary Policy Board said in its post-decision statement yesterday."It is tough, and we're staring down the barrel It is a tough time," RBA governor Michele Bullock acknowledged later at a press conference.Australia has become hostage to the oil price spike and, as Bullock puts it, it means "we are all feeling poorer".The problem facing the nation is that there is no clear solution or end in sight to Australia's worsening inflation problem.The Middle East conflict, Ms Bullock said, had "complicated things immensely".But it's more than that.The war, with its daily twists and turns, means the RBA will be largely flying blind on monetary policy until the Strait of Hormuz is opened for the safe passage of ships."Certainly, when I stood here in March, I think the war was maybe a week or two old, and everyone was thinking it'll be over in a couple of weeks," Bullock said."It isn't