Foreign Minister Penny Wong has confirmed China will work with Australian businesses on jet fuel supply, weeks after Beijing temporarily stalled fuel exports to prioritise domestic demand amid the global energy crisis.
The March halt in shipments had prompted fears of crippling shortages in Australia which relies almost entirely on overseas supply of jet fuel, with China accounting for about 30 per cent of the nation’s stockpile.
But in recent days, Chinese state-owned refiners have started to apply for permits to resume fuel exports in May, Bloomberg reports.
“I can confirm that the Chinese government is facilitating engagement with Australian businesses on jet fuel and I expressed my appreciation of this co-operation to Minister Wang this evening,” Senator Wong said during a press conference in Beijing.
She had earlier held bilateral talks with her Chinese counterpart, Wang Yi. The meeting comes a month after Anthony Albanese spoke with Chinese Premier Li Qiang and the two countries agreed to increase communication and co-ordination on energy security.
“We are committed to working with China to further areas of practical co-operation, including in energy security, and, of course, supporting China to host (the Asia-Pacific Economic Cooperation forum) this year,” Senator Wong said.
But Senator Wong later avoided questions on when fuel would start flowing or how much as a result of the deal. She also would not be drawn on which businesses or sector would be subsequently be engaging with the Chinese government.
“Those are commercial engagements, but we believe this is an important step but it is the first step,” she said.
Asked if Australians could take the agreement as an assurance of incoming oil in the near future, Senator Wong said: “The whole reason I’m here is to try and press for, advocate for, Australia’s interests, and in particular, for the commission of liquid fuels.”
She said it was “important to see that we all benefit from this foreign trade” but conceded she could not give further details.
“ … And that’s because we are at the first step, which is the agreement to facilitate engagement with our businesses on jet fuel,” she said.
“This is a very important step, it is the first step, because what we want to see is those engagements continue and commercial contracts to flow.”
But Chinese state-owned media later reported its own version of the talks and did not directly reference jet fuel discussions.
“Wang stated that people-to-people exchanges between China and Australia serve the interests of both sides, and both governments should further enhance mutual understanding,” a China Global Television Network report read.
“He hopes Australia will safeguard the safety and legitimate rights and interests of Chinese personnel.
“Wang said China’s friendly co-operation with Pacific Island countries doesn’t target any third party, and Australia should view this with objectivity and rationality.”
Iran accounts for 1.8 million barrels per day, and China is the primary buyer of Iranian crude.
Given the lag time between being loaded and landing at ports across the globe, some Middle Eastern oil shipments which took off before the conflict were still reaching their destinations in early April.
Global shipping and cargo data platform, Kpler, says forecast May and June oil exports from the Middle East have been cut by one-seventh.
Six million barrels per day are forecast to be exported from the region in the coming two months, down from seven million.
“Due to the discrepancy between our supply and demand revisions, the global crude balance has turned negative,” Kpler analyst Johannes Rauball said last week.
“Considering this discrepancy between our supply and demand revisions, global balances are expected to remain tighter than previously anticipated.
“Logistical bottlenecks post-reopening are expected to be the key near-term constraint on supply recovery.”
