Ayatollah Ali Khamenei's son Mojtaba was named as his late father's successor by Iran's clerical body.
The choice defies US President Donald Trump's declaration that he must be involved in picking Iran's supreme leader, and signals the regime intends to carry on as it has.
Mojtaba Khamenei is known to be close to the Islamic Revolutionary Guard Corps, which Australia has listed as a state sponsor of terrorism.
Australian Iranian Society of Victoria spokesman Kambiz Razmara said many people couldn't get in contact with their relatives in Iran.
"I've tried to ring my cousins and uncles and aunts, and I can't actually get through," he told AAP.
"People are frightened by what could happen to them in Iran and to the family members ... it's a kind of very unfortunate reality we face in our history."
Australia is considering the request of a Gulf state to deploy troops to the Middle East to help protect it against Iran's attacks.
The Albanese government is yet to disclose which nation made the request.
Iran has fired at neighbouring countries including the UAE, Qatar and Bahrain following the strikes by the US and Israel which targeted and killed the country's leader and senior officials.
The conflict has since disrupted travel, shipping, and global markets.
Mr Razmara said he hoped the US wouldn't walk away from Iranians by allowing the regime to continue.
"It is a pretty scary time for all our people here, we hope they won't throw us under the bus," he said.
"What is very, very, clear from our people and people in the diaspora ... is that we are opposed to what's happening in Iran.
"We're sick and tired of corruption, political oppression and fear that they instil in people."
Iran has been blocking access to the Strait of Hormuz following the US-Israel strikes with the closing of one of the world's most important oil corridors sending petrol and diesel prices soaring.
Flights for stranded Australians are operating from the UAE and Qatar to Sydney, Melbourne and Perth.
More than 1700 Australians have returned from the UAE since the start of the war.
There were about 115,000 Australians in the region at the outbreak of conflict.
The coalition has said it is open to Australia helping other countries in the Middle East, with opposition foreign affairs spokesman Ted O'Brien requesting a briefing from the federal government.
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