Here’s the key point: a conflict in East Asia – such as Beijing attempting to coerce Taiwan – would not just close down deliveries of crude oil; it would close down the deliveries of refined products too.There would be no question of being able to trade security of gas supplies from Australia for security of fuel supplies from Southeast Asia because the moment hostilities in East Asia were imminent, the shipping lanes carrying 50 per cent of the world’s trade would shut down.
It would take months for protected convoys to be arranged, even if the tankers and container ships could be procured to sail in them; and that’s assuming Australia and its allies had the requisite naval strength.
It’s worth noting that the US did not even try to counter the closure of the Strait of Hormuz either by landing troops at key choke points or by escorting ships through. It was the US’s counter-blockade of Iran’s ports, doing to Iran what it was doing to others’ shipping, that might have created a breakthrough.
Countries such as Britain and France, that might once have considered forcing the Strait, were adamant they could only secure the passage of shipping once hostilities had ceased. In other words, the task of protecting shipping seems to have become much harder in the era of smart mines and drone swarms. Which makes it more important than ever not to be dependent on just-in-time deliveries for the essentials of daily life.
It’s crystal clear what Australia now needs to do to avoid massive domestic upheaval when the next supply crisis comes, as it almost inevitably will.
First, we need to build the 90 days of fuel reserves onshore that the International Energy Agency mandates. Much of this could be done by assisting large fuel users to expand their private storages.
Second, we need to resume exploration, extraction and refining of crude oil here. The development of new fields, such as Queensland’s Taroom Trough, needs to become an urgent national priority rather than being bogged down endlessly, as would normally now be the case, in environmental assessments and activist lawfare.
Third, we need to expand our capacity to defend and maintain sea lanes via a more capable navy, a recreated Australian National Line, and detailed contingency planning with our military partners.
While it’s quite likely that the US made no formal request for Australian military assistance, given the last-minute nature of its decision-making, once it became clear that hostilities were likely, Australia should have volunteered to help. There’s no doubt the RAAF could have made a significant contribution to the US and Israeli air campaign to destroy the Iranian war machine, had the Albanese government been able to overcome its visceral antipathy to President Donald Trump, tilt against Israel, attachment to the fantasy of “international law”, and fondness for military announcements that make no appreciable difference to our near-term military capability.
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