Malaysia, the country’s top supplier of crude and third-largest source of petrol and diesel, has warned shipments to Australia could be disrupted if the conflict in the Middle East drags on, saying it may need to prioritise the needs of its citizens over its trading partners.
Prime Minister Anthony Albanese on Thursday announced national cabinet had established a taskforce to co-ordinate the distribution of fuel to areas of need, and canvassed the prospect of rationing should the conflict drag on.
The conflict has already begun rippling through Australia’s key fuel suppliers, with China and South Korea imposing export curbs on some refined fuel products, underscoring the risks for a country that imports about 90 per cent of its oil.
A spokesman for the Malaysian embassy could not rule out that Australia’s supply of petrol would be interrupted if the war between Iran, the United States and Israel continued.
“Of course, the [Malaysian] government will prioritise our own needs, and only then we can look at whatever demand that we receive from overseas,” the spokesman told The Australian Financial Review.
“There are some other countries as well that might be able to supply to Australia, but still, everyone is having the same problem right now.”
Malaysia produces its own crude but still relies on imported barrels from the Middle East to keep its export-oriented refineries running.
Figures from the Department of Foreign Affairs and Trade show Australian companies imported $6.9 billion of refined petroleum products from Malaysia last financial year, accounting for 14 per cent of total refined fuel imports, alongside a further $4.4 billion in crude oil, or about a quarter of all imports.
Following a crisis meeting of the national cabinet on Thursday, Albanese announced a Fuel Supply Taskforce to be led by climate and energy bureaucrat Anthea Harris. Each state and territory will have a representative on the taskforce, which will have the job of ensuring fuel is distributed to where it is needed on a nationally co-ordinated basis.
Albanese again urged people to stop hoarding petrol.
“There is no less fuel in Australia than there was three weeks ago. This has been an issue of increased demand,” he said.
Albanese said that both he and Foreign Minister Penny Wong had been engaging with their international counterparts to help ensure the continued flow of fuel and diesel shipments to Australia.
The Malaysian embassy spokesman said if Malaysia had enough supply to cover its own needs, then it made business sense to continue exporting to Australia, given oil was trading at $US111 per barrel, up from $US72 before the United States and Israel launched their offensive against Iran on February 28.
China last week instructed refiners not to load cargoes that had not cleared customs by March 11, leading to fuel bound for Australia failing to load at a Chinese port over the weekend.
South Korea, Australia’s second-largest source of refined petroleum, last week announced it would cap petrol and diesel exports at 2025 levels to stop local exporters from diverting supply to the more profitable international market.
About 70 per cent of South Korea’s crude oil originates in the Middle East, while around 20 per cent of Australia’s refined petroleum imports come from South Korea, according to DFAT figures.
A spokesman for the South Korean embassy insisted that the measures did not constitute a total export ban, but just an effort to ensure sales remained in line with typical levels.
“The government of the Republic of Korea will continue to maintain close communication and work closely with the Australian government for the stabilisation of petroleum product supply chains,” the spokesman said.
The spokesman said that Australia and South Korea’s energy supply chains were closely interconnected, with Australia the country’s largest supplier of natural gas and mineral resources.
Extracted in full from: https://www.afr.com/policy/foreign-affairs/australia-s-top-crude-supplier-warns-of-fuel-export-risk-20260319-p5prcv
