Australia is securing cargoes of crude and refined fuel from alternative sources
Australian petrol and diesel suppliers are diversifying their supply chains to bring in new shipments from five continents as they travel the world looking for extra cargo to stave off the worsening threat of fuel shortages.
The number of ships scheduled to deliver crude oil and refined fuel to Australia through April has risen sharply since late last month, according to maritime traffic data showing 55 cargoes headed to coastline terminals from as far afield as the United States, South America and Africa during April.
Concerns about Australia’s fuel security have grown as the conflict in the Middle East continues without a clear timeline for resolution from US President Donald Trump. Ongoing disruptions in the Strait of Hormuz have blocked critical crude oil supplies to major Asian refineries that traditionally supply 80 per cent of Australia’s liquid fuel needs, raising the threat of domestic supply shortages this month.
The Albanian government is encouraged by the volume of fuel imports currently in transit, Energy Minister Chris Bowen said on Friday.
“The sooner the war ends the better… but Australian companies are diversifying,” he said. “We’ve seen more supplies on the way from other parts of the world, the United States, Mexico and other places.”
Lurion De Mello, a senior lecturer at Macquarie University’s Center for Research on Transforming Energy Markets, said the number of shipments heading to Australia had increased over the past 10 days. He estimated around 10 to 15 extra shipments would arrive in Australia in April, on top of what would be expected to arrive in normal times.
“There is a phenomenal increase in numbers,” he said. “You don’t usually get this many tankers.”
Viva Energy, which supplies 30 per cent of the nation’s fuel from its Geelong oil refinery and through import terminals, said its trading team had achieved results in a “very challenging market” by sourcing additional cargoes from far-flung supply sources in the US and South America: “We have a good fuel flow in May and a good crude oil flow into July for our refinery in Geelong,” Viva CEO Scott Wyatt said.
Ampol has also expanded its search for crude and refined fuel from suppliers in the US and Europe.
Bowen said Asia’s mega-refineries were starting to diversify their supplies of the crude oil they need to process into petrol, diesel and jet fuel, which was “very important for Australia because most of our refined products come from Asian refineries”. “This is something Australians can have some confidence in.”
However, the availability of one-off fuel cargoes in the Asian spot market has shrunk significantly in the past month. While regional refineries have cut production rates, Beijing has halted exports of Chinese transport fuel to shore up its own domestic stocks.
De Mello said that while April supplies increased, the “lag effect” of not enough oil reaching Asian refineries in the coming weeks continued to cause concern for Australia, threatening to restrict exports from the region in May. “That’s when supply can start to be affected,” he said.
Although spot fuel cargoes are available elsewhere, securing them has become “more expensive and riskier,” especially for smaller importers, Bowen said. To alleviate this, the federal government announced it would undertake the purchase of spot fuel cargoes through the Export Finance Australia credit agency.
Bowen said that as of Friday, 410 service stations across the country were diesel-free and 193 service stations were gasoline-free. “We continue to see service stations being replenished across Australia, but we are also seeing very high demand,” he said, urging drivers to avoid panic buying and those planning long weekend road trips to “fill up the city if possible to help the country”.
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Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
