Six oil ships bound for Australia have been cancelled in recent days but the federal government is not yet considering any drastic measures, the energy minister, Chris Bowen, says.
Bowen said on Sunday that six ships from Malaysia, Singapore and South Korea, that had been expected to arrive next month, were cancelled or deferred. The federal government was working to replace the ships, with some already substituted, the minister told ABC TV.
Australia receives about 80 shipments of oil each month, on average, predominantly from Asia. On Friday, Reuters reported record amounts of US fuel were being exported to Australia amid supply chain disruptions.
“The flow of oil to Asian refineries has slowed, and that has downward impacts on us,” Bowen said on Sunday.
“We’re in an uncertain environment, so that’s why we’re doing … all the preparatory work.
“People think ‘Well, all the ships are coming now, and one day they’ll all stop in one go’. [But] that is highly unlikely to be the case. It’s much more likely that there’ll be bumps in supply, but that governments will work with the refiners and the importers to manage those and minimise impacts.”
Bowen said fuel supplies within Australia were slightly higher than before the crisis began, with 38 days of petrol. There was 30 days supply of diesel and jet fuel.
The weeks ahead could be more challenging with disruptions expected to occur for shipments arriving in late April and May, the minister conceded.
Energy analysts have warned that major producers in Asia, such as Malaysia and South Korea, could cut exports to Australia to prioritise domestic fuel needs.
Kevin Morrison, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, said on Friday that a warning from Malaysian officials that the crude oil supplier would “prioritise” its own needs was “really significant”.
“South Korea, Japan and India are all very vulnerable. They hardly produce any oil so they are all very dependent on oil imports,” he said.
“If they are facing the situation where crude oil supplies are declining, and there’s no sign of the conflict ending, obviously they would prioritise their domestic markets over exports.”
Bowen ruled out invoking fuel rationing laws, which haven’t been used in decades, in the short term.
“It’s not designed to be invoked lightly,” he said on Sunday. “We are not contemplating at this point needing to use any of those powers … we’re sending the message to Australians that, please buy as much fuel as you need, but no more.”
The energy minister said it would be a “sensible” thing for Australians to minimise their fuel use by working from home, where possible, following a recommendation from the global energy watchdog, the International Energy Agency.
Australia has two of its own oil refineries, which Bowen said were working “full pelt”. They refine about 20% of the country’s domestic fuel.
Last Thursday, Bowen announced an additional 519m litres of petrol and diesel had been released for sale from reserves and would be directed to regional Australia.
The new Nationals leader, Matt Canavan, has called on the federal government to consider oil drilling in the Great Australian Bight.
In a statement where he copied Donald Trump’s “drill baby drill” slogan, Canavan last week said that unless Australia launched new oil projects in the Bight and elsewhere, “we will always be at the mercy of unstable regions and international conflicts”.