‘Bumps’ but no fuel shock yet as tankers cancelled
The six canceled oil shipments will not cause fuel shortages in Australia, but experts warn the canceled deliveries highlight the country’s vulnerability to global supply disruptions.
Energy Minister Chris Bowen announced the tanker cancellations on Sunday, acknowledging there could be “increases in supply” due to conflict in the Middle East.
Iran’s decision to effectively close the Strait of Hormuz, a key global trade route, in response to attacks by America and Israel has caused global oil prices to soar.
Domestic gasoline and diesel prices have risen, but the government has repeatedly said shortages in some regional and rural areas were due to panic buying rather than supply problems.
Mr Bowen said more than 80 fuel shipments were delivered to Australia in an average month but a handful had been scrapped in recent weeks.
“We are aware of six boats being cancelled,” he told ABC’s Insider programme.
“Some of these have already been replaced by other sources by importers and refiners.”
Swinburne University expert Hussein Dia said the cancellation of the six tankers did not pose a nationwide fuel shortage as supply chains were adjusted and alternative shipments were provided.
But Professor Dia said this highlighted a deeper structural problem in Australia’s fuel system, given Australia imports 80 to 90 per cent of its liquid fuels.
“This makes us vulnerable to global disruptions from geopolitical tensions, refinery disruptions or shifts in international demand,” he told AAP.
“What we are seeing now is not a collapse in supply but increased volatility. If disruptions become more prolonged or widespread, pressure on fuel availability could increase, particularly in regional areas where supply chains are more fragile.”
University of the Sunshine Coast finance expert Sajid Anwar said the cancellations were a critical stress test for the country’s energy resilience as people also struggled with rising inflation.
“The risk of a wider economic downturn has intensified as households face record fuel prices and rising mortgage repayments, making responsible consumer behavior such as avoiding panic buying and embracing fuel-efficient driving vital to stabilizing the market,” he said.
Mr Bowen said the flow of oil to refineries in Asia had slowed, with negative implications for Australia.
Australia’s international fuel supplies were unlikely to be cut off completely, but he acknowledged there could be challenging periods.
“It is much more likely that there will be fluctuations in supply, but governments will work with refiners and importers to manage these and minimize the impact,” the minister said.
Some service stations in regional areas are out of stock as gasoline prices soar above $2.50 per liter and diesel prices exceed $3 in some places.
Mr Bowen said Australia’s two refineries were operating at “full steam” to produce fuel for domestic use and the country’s total supply had remained unchanged since the start of the conflict.
Opposition transport spokeswoman Bridget McKenzie has suggested Australia should turn to biofuels to ease the famine.
“Alternative Australian-grown biofuel blended fuel can help reduce this exposure, support national energy resilience and reduce emissions,” the national senator said.
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