In Securing Energy Securities Australia Is Desperate As The Nation Is Completely Dependent On Oil.

Sydney; April 2026: Heavily dependent on imported oil, Australia looks for quick fixes from regional diplomacy to free trains, but it may be homeowners and island neighbours driving the change that is really needed.

Since the early of March, the Strait of Hormuz, through which 20% of the world’s oil and liquefied natural gas (LNG) supplies are shipped during peacetime, has been effectively closed and shipping traffic has fallen by 95%.

Australia’s heavy reliance on oil refined in South East Asian countries which, in turn, import crude oil through the Strait of Hormuz has seen the government turn to “fuel diplomacy” and fuel tax cuts to try to limit price shocks. But experts have voiced these actions are short-termed which will not have their impact in longer-term problems associated with Australia’s heavy reliance on fossil fuels.

Australia imports about 80% of the refined fuels it needs, much of it from “regional refining hubs such as Singapore, South Korea and Malaysia, which in turn depend on crude oil imports from the Middle East”, said Hussein Dia, professor of transport technology and sustainability at Swinburne University of Technology in Melbourne. “While some Asian economies may face more immediate exposure, Australia remains structurally vulnerable due to its reliance on imported refined fuel and extended supply chains”, Dia told news reporters.

In a bid to bridge this gap, Australia’s Prime Minister Anthony Albanese has turned to “fuel diplomacy”, said Dia, with recent visits to Singapore, Malaysia and Brunei, where he has been trying to shore up the supply of fuel and fertiliser. As a major exporter of LNG and coal, Australia has some leverage in these negotiations, said Tim Buckley, director of think tank Climate Energy Finance (CEF). But, he added, it is notable that Australia’s position is very different to that of its historic allies, the US, which is not as dependent on oil exported through the Strait of Hormuz.

“We don’t get any of our oil from the US. I would put absolutely no reliance on our historic alliance with America as to helping Australia sail through this crisis. America has started the war. America had no plan”, Buckley reiterated.

Earlier on 30th March, Prime Minister Albanese had announced that government will slash petrol and diesel taxes by half amid a surge in fuel prices prompted by the US-Israel war on Iran. The Australian Prime Minister had then asserted that, the fuel excise would be cut in half from April 1 to June 30 in recognition of the “financial stress” caused by rising energy prices.

Albanese had then said the move would reduce the cost of petrol by 26.3 Australian cents ($.18) per litre, saving motorists nearly $19 ($13) on a 65-litre (17-gallon) tank of fuel. “We understand the cost pressures for people are very real as the impact of the war on the other side of the world plays out right here. We’re acting now to be over-prepared”. Albanese then said the government would also suspend its charge on heavy vehicles for three months.

Meanwhile, Ketan Joshi, an analyst at the Australia Institute has said that the steps adopted by the Albanese regime is “sugar-coated’ that could be counterproductive. “Subsidising fossil fuels during a crisis where fossil fuels are becoming expensive has a very perverted effect, where you end up increasing reliance on the thing that is most acutely causing the pain in society”, Joshi stated, while adding further, “Elected in the wake of devastating bushfires in 2019-2020, the Albanese Labor government promised to make Australia a ‘renewable energy superpower after years of conservative governments digging their heels in on fossil fuels”.

Adding worries to Australia’s woos, a fire at the crucially important Geelong Oil Refinery in Victoria this week has reminded policymakers that Australia’s domestic supply of refined oil is provided by just two facilities, both more than 50 years old. Geelong is the largest, producing 120,000 barrels of refined oil per day; the other is the Ampol Lytton Refinery in Brisbane, Queensland. The fire, which burned for several hours at Geelong – coinciding with the energy crisis – prompted Australian Energy and Climate Minister Chris Bowen to cancel next week’s trip to the world’s first conference on phasing out fossil fuels in Santa Marta, Colombia.

Bowen recently told reporters in Canberra that, unlike oil, “the Australian sun cannot be interrupted by a war or anything else. The solar energy has to travel 150 million kilometres from the sun. It doesn’t have to travel the 150 kilometres of the Strait of Hormuz”.

While neighbour’s – France announced last week that it will spend 10 billion euros ($12bn) a year to electrify its economy, and Indonesia, still reeling from recent floods, has pledged to increase solar energy output to 100 GW, Bowen has not recently announced any new investments in renewable energy. This reflects a longer history in Australia where a relatively high uptake of solar has mainly been driven, not by central government policy, but by homeowners installing solar panels on their rooftops, often with subsidies from state governments.

With one in three Australian homes now with rooftop solar panels, four of Australia’s six states have announced that households will soon be receiving three hours of free electricity a day. While not directly linked to the price shocks associated with the war, Joshi notes that the timing of these announcements is “incredible”.

“Increasing the integration of solar power into the power grid is directly significantly reducing gas use in Australia”, a commodity which saw significant price increases in Australia due to Russia’s invasion of Ukraine in 2022, Joshi added, “Paired with batteries, solar power deployment in Australia is having a material reduction in the burning of gas, and also it is bringing about a long term systemic change” for when “the next crisis” occurs.

Suvro Sanyal – Team Maverick.