{"id":517717,"date":"2026-04-07T14:12:16","date_gmt":"2026-04-07T14:12:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/517717\/"},"modified":"2026-04-07T14:12:16","modified_gmt":"2026-04-07T14:12:16","slug":"australia-has-deep-pockets-to-shield-it-from-the-strait-of-hormuz-global-oil-problem","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/517717\/","title":{"rendered":"Australia has deep pockets to shield it from the Strait of Hormuz global oil problem"},"content":{"rendered":"

\"Mike<\/p>\n

Updated April 7, 2026 \u2014 8:45pm,first published 7:45pm<\/p>\n

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When it comes to petrol and diesel, Australia relies on imports for nearly all its needs. It now confronts the prospect of dire economic consequences if the Iran war drags on and supplies run short.<\/p>\n

But Australia is not entirely helpless in its predicament. The prime minister\u2019s trip to Singapore this week<\/a> shows how the nation can leverage its trade and economic heft.<\/p>\n

\"OilOil tankers lining up at Singapore\u2019s fuel refineries. Bloomberg<\/p>\n

Shipments through the Strait of Hormuz have been shut off since February 28. The blockade is Iran\u2019s major economic weapon in the war, and it continues to use it as the conflict runs through its sixth week.<\/p>\n

This means about 20 per cent of global crude oil that Asian refineries rely on to produce petrol and diesel have been held up. Refineries in countries including Japan, Malaysia, South Korea and Singapore, which supply most of Australia\u2019s fuel, have started eating into their stockpiles as their usual supply lines run short.<\/p>\n

Related Article\"An<\/a><\/p>\n

But these countries are now scouring the globe to find new places to get oil. If they find it, it will probably cost more. And as one of the richest nations in Asia, Australia is well placed to tap into the new supply lines.<\/p>\n

Australia is a wealthy nation with deep pockets and has an economy that can absorb high fuel prices for much longer than many neighbours such as Thailand, Vietnam and the Philippines.<\/p>\n

While these emerging economies have already kicked off fuel-saving measures such as work-from-home requirements, the federal government is advising Australians they should maintain their typical fuel use, and last week even halved the cost of fuel excise, effectively encouraging people to buy petrol and diesel.<\/p>\n

\"AtAt least 55 ships carrying oil and refined fuel are headed for Australia by the end of April. Arrows are ships en route to Australia; squares are still at port.London Stock Exchange Group and Dr Lurion De Mello, Macquarie University<\/p>\n

Energy Minister Chris Bowen has created a scheme for the government to underwrite private companies bringing expensive fuel shipments to Australia, and he said on Monday that Australia had secured adequate shipments \u201cwell into May\u201d.<\/p>\n

A big chunk of Middle Eastern oil supply is shut off, but 80 per cent of global production is unrestricted, and companies in nations such as Nigeria, Senegal, Canada, the United States and Mexico are investigating their options to ramp up oil production to cash in on sky-high prices.<\/p>\n<\/p>\n

If the strait remains shut, global supplies will continue to tighten in coming weeks. But Australia\u2019s purchasing power means it will be an attractive destination for existing stocks.<\/p>\n

Recent reports that Iran is starting to resume shipping through the strait, and charging a toll of $US2 million a ship, emphasises the future for Australia could be one of secure fuel supply with high prices.<\/p>\n

Australia can also leverage its own resource exports to boost fuel security via the massive gas industry in Western Australia and Queensland.<\/p>\n

Related Article\"Petrol<\/a><\/p>\n

Two of the biggest Asian fuel exporters, Japan and Singapore, get about 40 per cent of their gas from Australia; it is critical to their electricity grids.<\/p>\n

Anthony Albanese will visit Singapore from Thursday, seeking a deal of mutual assurance on energy trade.<\/p>\n

Australia\u2019s gas industry is run by private companies, as are Japanese and Singaporean oil refineries. Moreover, Australia\u2019s gas trade is subject to export control by the federal government, and as the Iran war has shown, energy trade is critical to the global economy.<\/p>\n

While Australia has never interfered with gas exports, it is expected that at this time of heightened energy supply risk, assurances between nations of continued reliable trade could be used to secure fuel supply for the coming months.<\/p>\n

However, Australia\u2019s potential to escape fuel shortages will eventually hit a brick wall if Iran keeps the strait shut for months to come.<\/p>\n

The iron law of arithmetic will dictate that if embargoes persist, global oil demand will outstrip supply and the only response for nations, including Australia, would be cutting demand by rationing fuel use.<\/p>\n

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter<\/a>.<\/p>\n

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\"MikeMike Foley<\/a> is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Updated April 7, 2026 \u2014 8:45pm,first published 7:45pm Save You have reached your maximum number of saved items.…\n","protected":false},"author":2,"featured_media":517718,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-517717","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/517717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=517717"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/517717\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/517718"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=517717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=517717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=517717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}