Australia looks to access US fuel reserves to shore up supplies amid Persian Gulf tensions
Quote:Key points:
* Australia has less than a third of the fuel supplies it is required to under an international agreements
* Defence Minister Linda Reynolds said the Coalition was eyeing off America's tightly guarded reserves
* It comes as Australia considers sending vessels to the Persian Gulf amid escalating tension
Australia is eyeing off the United States' tightly guarded fuel reserve as it seeks to overcome having less than a third of the stocks it should.
It comes as Australia contemplates sending vessels to the oil-rich Persian Gulf amid escalating tension on the Strait of Hormuz.
Australia holds just 28 days' worth of fuel imports, well below the 90-day minimum required under international agreements.
Rather than buying and storing the required amount of petroleum domestically, Defence Minister Linda Reynolds said Australia was seeking to access America's emergency supplies.
"The Government is in the early stages of very constructive discussions with the United States about the potential to access their strategic petroleum reserve, which would greatly boost our own stocks and also the flexibility of supply," she said.
The strategic petroleum reserve contains tens of millions of barrels of oil stored underground in the United States and is the world's largest emergency fuel supply.
Senator Reynolds and Defence Minister Marise Payne met with their US counterparts on Sunday, when they discussed US plans to expand its missile stocks throughout the Asia-Pacific.
It is unclear how much Australia would cost to tap into the US reserve, but Energy Minister Angus Taylor said it would be cheaper than creating a "physical" reserve here.
"The whole point of this is to minimise costs," he said.
"What we don't want to do is establish a physical reserve at very high cost in Australia and pass on that cost to Australians at the bowser."
Critics of this approach argue economics should not be the sole consideration when it comes to national security.
Australia's four oil refineries produce about half of the country's transport needs, which means the other half comes via shipments from the Middle East and Asia.
The reliance on imports means Australia would face serious consequences if there was any disruption to those shipments.
The Government is awaiting the findings of a fuel security review before finalising any plans, but Senator Reynolds acknowledged the urgency in securing Australia's petroleum supply given volatility in the South China Sea and recent tensions in the Persian Gulf.
"Australia's reliant on traffic through the Strait of Hormuz for a percentage of our oil supply, so we're doing everything that we can do be a good government and be prudent to ensure a continuity of supply," she said.
Australia is currently considering a "complex and serious" request to join a US-led naval patrol in the Persian Gulf to protect oil tankers against Iranian aggression.
The Coalition have grossly mismanaged Australia's fuel reserve. They had ample opportunity in the last five years to bring it up to 60 days of fuel or more. The price of fuel was low over the last few years and that was a good opportunity to boost the reserve to more sensible levels. The Coalition missed that opportunity. Now that Iran is causing tensions in the Persian Gulf, the Coalition have been caught out. Badly. Now they're essentially forced to beg for fuel, no doubt at inflated prices.
It could get worse. If the Coalition do not manage to secure additional fuel and our fuel supply is disrupted, we could end up having a very serious national emergency. Tight fuel rationing, the price of petrol spiking to $3 a litre or more, and the possibility of severe economic consequences.
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