If there is one prevailing misconception about the war in Iran, it is the idea that the closure of the Strait of Hormuz will hurt the US the most. This is simply not the case. In reality, only around 7% of US oil imports actually travel through the Hormuz to get to American markets. The potential long term instability in the strait is far more damaging to economies in the East, and by extension, Australia faces potential crisis.
Direct petroleum imports are not the biggest problem for Australia; around 15% of their oil crosses the Hormuz. Instead, the country relies heavily on refined fuel products exported from Asia, and Asian countries rely on the Hormuz for 40% to 70% of total oil needed for the refining process. Over 50% of Australia's refined fuel products rely on oil passing through the Hormuz.
This means that a vast majority of Australia's diesel, gasoline, jet fuel and kerosene is on the verge of a supply collapse should the Hormuz remain under threat. Experts suggest the country has one month before crisis strikes and rationing is implemented.
Contracted shipments of oil to Australia were all but guaranteed for at least the next month, Energy Minister Chris Bowen said.
"The oil companies say to me that they fully expect all deliveries all through March and well into April, but we are in an internationally uncertain time and that's why we're doing such planning at the moment..."
NRMA spokesman Peter Khoury has urged people to remain calm, saying there has never been a point in Australia's history when supply wasn't coming in.
"As long as supply continues there is no need to panic, and supply has been continuing..."
The reasons for Australia's oil vulnerability are numerous, but much of the blame can be attributed to a lack of government concern over energy independence and an ongoing progressive obsession with climate change and "green energy" projects.
The Aussie government does subsidize the domestic oil industry, however, this is done largely to maintain rather than expand capacity. Australia's two refineries are aging and contribute only 20% of the nation's total fuel products. Asian imports are cheaper, but that's only under stable geopolitical conditions (which is becoming obvious). Australia's refusal to improve and expand their own production is coming back to bite them.
On top of their crippling reliance on Asia, the far-left Australian government has set the country up for economic suicide by implementing nonsensical carbon restrictions and climate change mandates. They have diverted over $22 billion into green tech, which is far less efficient and not yet capable of running the majority of their power infrastructure.
Oil exploration is increasingly difficult and there are no plans for new refineries. Furthermore, nuclear energy is completely banned since 1998.
Australia's entire energy infrastructure is built around a "just in time" import model. Meaning, the country does not have a reliable long term store of fuel products for emergency use. The government only introduced a "Minimum Stockholding Obligation" (MSO) in 2023 due to the start of the Ukraine war. This gives the economy around 30 days for supplies of all products before total breakdown.
Australia is the only IEA member that has not met the mandatory 90 days of net import equivalent reserves since 2012 (most hold 140+ days on average)
And, given that they have limited domestic production, there is no way for the country to adapt to a crisis. It would take them years to recover without ample imports. Shipping data reveals oil supplies from the United States are now heading across the Pacific to help meet demand.
No comments:
Post a Comment