Senior federal government minister Simon Birmingham is urging Iran to remain calm as diplomatic tensions increase between the Middle Eastern nation and the United States.
US President Donald Trump has threatened to obliterate parts of Iran if it attacked "anything American" after his Iranian counterpart Hassan Rouhani said the latest US sanctions had scuttled any chance of diplomacy.
Mr Rouhani also called the White House's actions "mentally retarded".
Trade minister Senator Birmingham said Australia wasn't "at present" part of any coalition being created against Iran.
Despite the rhetoric, US had only increased its economic sanctions.
"We have serious concerns around Iran's destabilising behaviour. We urge calm from the Iranians in their response to at what at present are purely economic sanctions," he told ABC radio on Wednesday.
"But economic sanctions designed to influence the behaviour of a state to prevent them from the escalation of development of nuclear technologies, and military activities and terrorism activities that could well undermine the peace and prosperity of the rest of the world."
He also said Australia was constantly reviewing the sanctions it had in place on Iran.
A spokesman from the Department of Foreign Affairs and Trade says Australia is consulting with its allies while closely monitoring the situation, including through embassies in the region.
"Australia has made clear that it shares the international community's concerns over Iran's destabilising behaviours," he said.
"Australia maintains current United Nations Security Council sanctions on Iran and continues to apply autonomous sanctions."
Labor defence spokesman Richard Marles says the opposition has asked for a briefing on any requests for Australia's involvement.
"It would have to be considered very carefully before Australia took any steps here," he told ABC radio.
"Having said that, we are very concerned about the actions of Iran. Iran has been a destabilising influence in the Middle East."
Mr Marles said he would judge the US based on its actions, not the rhetoric of Mr Trump.
"Obviously this rhetoric is concerning but the actions of Iran have been concerning," he said.
"We need to move forward in a sober and measured way here."
