Anthony Albanese is setting off on a two-day trip to Singapore in efforts to shore up Australia’s fuel stockpile from one of the nation’s largest suppliers, as his government courts key Asian trading partners to mitigate the economic shocks of the war in the Middle East.
Singapore is Asia’s largest oil trading hub and the world’s sixth-largest refinery export hub.
Its exports make up 26 per cent of Australia’s total refined fuel stockpile. Of this, Singapore provides 55 per cent of the nation’s petrol, 22 per cent of its jet fuel and 15 per cent of its diesel.
In return, Australia is Singapore’s second-largest supplier of liquefied natural gas (LNG) and provides the Indo-Pacific country with 32 per cent of its supply.
While Qatar is Singapore’s biggest gas supplier, prices have soared after a Qatari gas facility was extensively damaged by Iranian missiles in late March. It has subsequently increased global demand for Australian LNG.
Friday’s meeting between the Prime Minister and his Singaporean counterpart, Lawrence Wong, will build on the existing deal signed in March, where both countries committed to maintaining trade flows and to consult each other over any disruptions impacting energy trade.
Part of that deal also included addressing import and export restrictions and it is understood these settings, in the context of a constricted market, will be on the upcoming meeting’s agenda.
The joint talks will follow Mr Albanese’s visit to Jurong Island, a 3000-hectare offshore island near Singapore’s CBD that is home to the country’s three main refineries, alongside more than 100 global companies involved in the oil or petrochemical trade.
The island’s enormous refining infrastructure allows it to process more than 800,000 barrels per day. It means that, despite having no domestic crude oil reserves, Singapore’s refining output has drawn keen trade interest from its Asian neighbours and Europe.
Prior to the war, Singapore imported about 70 per cent of its crude oil from the Middle East but in recent years has diversified its supply mix to include Africa, Malaysia, India and Vietnam.
On Tuesday, Mr Albanese said the trip – which had been brought forward in the year – would be an “important progression”. He said trading relationships with Asian partners paid “dividends at difficult times”.
“ … Because we’ve been able to have those conversations and work together, which is what we will do,” he said.
The Singapore trip comes days after Mr Albanese spoke with Chinese Premier Li Qiang to discuss the “importance of energy security”.
A readout of the conversation provided by the Prime Minister’s Office said the pair had “agreed to increase government-to-government communication so that Australia and China are both working in support of regional energy security”.
China, which supplies about a third of Australia’s jet fuel, has restricted refined fuel exports following the outbreak of war.
It follows international reports that Japanese Prime Minister Sanae Takaichi is planning a trip to Australia to discuss the Strait of Hormuz, along with co-operation on security and rare-earth minerals.
Last week, Australia had gained assurances from Japan, South Korea, and Singapore that Asian exporters would continue to provide fuel supplies to Australia as per usual, despite the conditions in the Middle East.
Energy Minister Chris Bowen said this week Australia’s fuel supply was secure “well into” May.
It comes as the federal government implemented a number of emergency measures over the last few weeks, including the adoption of a National Fuel Security Plan, temporary slashing of the fuel excise, expanded powers for the commonwealth to underwrite additional fuel cargoes, and relaxing of fuel standards.
