Australia has been caught napping with just 28 days of its emergency oil left – now it might be forced to strike a deal with Trump
- Australia is at the biggest risk of an oil emergency shortage in years, with recent strikes in Saudi Arabia threatening the global supply, and Australia’s own reserves less than a third of their mandated level.
- Accordingly, the Australian government has been trying to negotiate with the Trump administration for months to gain access to the US supply to relive pressure on it and reduce the possibility of running out.
- That puts Scott Morrison in a tough negotiating position when he meets with the President at a state dinner in Washington this week. The US has previously signalled that it wants to place missiles in northern Australia and expects Australia to help secure the Strait of Hormuz amid Iran tensions.
The strike over the weekend on two major refineries in Saudi Arabia immediately wiped out 5% of the world’s oil production – and it’s Australia which could be most at risk.
That’s because Australia has long ignored its commitment to the International Energy Agency (IEA) to hold months worth of oil in reserve in case of disruption to its supply.
“As a Member of the IEA, Australia is obliged… to maintain oil reserves equal to 90 days of net imports of the previous year,” according to the IEA.
However, Australia maintains less than a third of that requirement — holding just 28 days worth of petrol and crude oil in reserve, according to the latest figuresfrom the Department of the Environment and Energy. Even if you adjust those figures against net imports, Australia has less than 60 days – or two thirds – of its mandate.
That’s partly because despite monitoring Australia’s compliance, there’s no enforcement or penalty for members that don’t meet that quota. In fact, for a country of its size and wealth, Australia has some of the smallest stockpiles. Compare that to Australia’s allies. New Zealand has 92 days of coverage, Japan has 185 days, Britain 280 days, and the US a world-beating 700 days.
Be interesting if she goes cap in hand to Trump and asks for some oil. Oh the shame. What will the woke greenies say?