Two of Australia’s largest fuel suppliers, Ampol and Viva Energy, have ruled out new orders of Russian-origin crude in response to the country’s invasion of Ukraine in a move that may put further pressure on petrol prices.
Viva, the operator of the Geelong oil refinery and the nationwide network of Shell and Liberty petrol stations, said it was “appalled by the events unfolding in Ukraine” and extended its sympathies to those affected by the conflict.
“Without these supplies, the company faces gaps in its refining program and potential fuel shortages.”
ASX-listed fuel giant Ampol on Tuesday also condemned Russia’s actions in Ukraine and confirmed it had not purchased Russian crude oil or other fuel products since the onset of the conflict. However, it had also previously purchased two Russian cargoes prior to the invasion that were due to discharge by the end of April.
Russia is a major global oil supplier accounting for up to 11 per cent of the world’s crude oil production. In 2020-21, Australia imported 1.5 per cent of its total crude oil and other refinery feedstock from Russia.
As Western nations impose economic sanctions on Moscow and global investors, refineries and shippers shun Russia’s vast energy sector, the price of crude oil has pushed past $US100 a barrel and reached as high as $US139 earlier this week, its highest level since 2008.
Australian motorists are already paying record high unleaded prices of about $2 a litre in some parts of the country and economists are now expecting prices to soon exceed $2.10. Australia’s petrol prices are linked to international oil markets via the Singapore refined unleaded benchmark, known as Mogas 95.
Ampol said geopolitical events in Ukraine and the sanctions on Russia were putting pressure on global oil prices and impacting Australian fuel prices. “We will continue to focus on delivering products safely and reliably to our customers using the strong existing supply chains we have in place,” it said.
Viva said it sourced crude oil – which it processes into refined fuel products – from many different countries and expected to be able to maintain supplies to support Australia’s energy security. “We are keeping the Australian government informed of the evolving situation,” it said.
While Viva operates in Australia under the Shell brand, all its crude oil and fuel is purchased from Vitol, the world’s largest independent trader of energy based in Singapore. Shell has no involvement or connection with Viva Energy’s crude oil and fuel supply.
Energy Minister Angus Taylor last week said the global oil market was showing “signs of uncertainty” in response to Russia’s invasion of Ukraine. Mr Taylor said Australia would work with international partners to build confidence in the market and stabilise prices, including by releasing oil stocks held on Australia’s behalf in the US Strategic Petroleum Reserve.
Extracted in full from: Viva, Ampol shun Russian oil cargoes over war in Ukraine (smh.com.au)