Albanese called for de-escalation, noting that US-Israeli attacks had degraded Iran's air force, navy and military industrial base.
"Now those objectives have been realised it is not clear what more needs to be achieved or what the end point looks like," he said during a speech in the capital Canberra.
"What is clear is that the longer the war goes on the more significant the impact on the global economy will be."
Australia, reliant on imported fuel and holding roughly 37 days' supply of petrol, has sought to soften the impact of soaring prices by cutting petrol taxes and pledging $680 million in loans to businesses.
Albanese has previously said Australia is not a participant in the war.
Defence Minister Richard Marles said Thursday Canberra was in talks with Britain and France on how it can contribute to opening the Strait of Hormuz, through which one-fifth of the world's oil passes in peacetime.
Iran has effectively closed the vital strait since US-Israeli strikes on February 28 sparked a larger regional conflict, causing global oil and gas prices to soar.
"We have an interest in the Strait of Hormuz being open. It is a function of when conditions allow any of these steps to take place. And those conditions don't exist right now," Marles said in an interview with Sky News Australia.
Marles said Australia will attend a multi-nation meeting convened by Britain.
Albanese's comments Thursday came as US President Donald Trump gave a speech laying out his view of the war, vowing two to three more weeks of "extremely hard" strikes against Iran.
Trump said the United States was aiming to crush Iran's military, end the Islamic republic's support for regional armed groups and prevent it from obtaining a nuclear bomb.
"I'm pleased to say that these core strategic objectives are nearing completion," Trump said in a 19-minute televised speech.
