EDITORIAL: Moves to tackle the oil supply crisis have eased fears

It has been a long and worrying road.

And expensive.

But at last it seems the temperature has been lowered in the national scramble to secure enough fuel. For now at least.

Australia has bolstered its fuel reserves by nearly a third compared to before the Iran conflict started, and petrol and diesel supplies have been secured into June.

Industry and Government leaders met again on Thursday to discuss the ongoing fuel crisis sparked by the near-closure of the Strait of Hormuz, with Prime Minister Anthony Albanese saying afterwards that the outlook remained secure in the near-term.

“However, we’re working hard to prepare for contingencies in the event of supply disruptions in fuel and in fertiliser,” he said.

Petrol reserves — which are supplies in storage beyond what is available for sale around the country — are sitting at 46 days now, compared with 36 days’ worth at the end of February.

Diesel reserves are at 31 days and aviation fuel 30 days. Australia is diversifying its sources for fuel beyond traditional major suppliers in Singapore, Malaysia and Korea, all of whom are dependent on crude oil from the Middle East for refining.

The proportion of Australia’s fuel coming from the US has increased sixfold, up to 18 per cent of the current supply, and Argentina, which wasn’t among the top 20 sources last year, is into double digits.

“The key here is achieving supply. That is our top priority. The reality remains, of course, that the strait is still closed and has been closed now for two months,” Mr Albanese said.

“We’re in deeply tumultuous and turbulent global times, and people are aware of that, and can see that that is the case. We are doing what we can to alleviate this issue. We’ll continue to do what we can to see if there are further cargoes that are available for purchase in the spot market.”

The national Cabinet meeting came a day after the Prime Minister announced government underwriting had helped fuel suppliers secure an additional four shiploads of diesel fuel that would arrive in late May and early June.

There are now 65 ships carrying oil, diesel, petrol and aviation fuel on their way to Australia. Mr Albanese said any shift to the more severe stage three of the national fuel emergency plan was “certainly not imminent”.

However, Mr Albanese rubbished reports the Government was in talks about reopening or building a new fuel refinery. There are just two remaining refineries, one in Brisbane and one in Geelong, down from six in 2013.

The Prime Minister said he was open to discussion on “any constructive proposals” but at the moment the Government was focusing on immediate solutions, not things that would take a long time.

The news that oil supplies were being boosted is very welcome. The supply crunch had flowed through to drive prices up right across the economy, and was being felt in sectors from farming to construction.

Of course the ultimate answer to what happens next rests with the United States and Iran.

Responsibility for the editorial comment is taken by Editor-in-Chief Christopher Dore.