Current stockpiles are alarmingly low, with reserves covering less than one month. This leaves the country in breach of a long-standing international agreement and at significant risk if global oil flows are interrupted. Although government officials claim fuel levels are at a 15-year high, analysts and former defence personnel argue that extended disruption could bring transport, delivery networks and essential services to a halt.
Australia holds the equivalent of only 49 days of net oil imports, far behind the 90-day requirement under the International Energy Agency (IEA) agreement it joined in 1974. The IEA mandate is intended to promote global energy stability during emergencies. Australia has failed to meet this obligation since 2012. In contrast, New Zealand holds 92 days of reserves and the average for net-importing countries is 141 days.
Recent figures show that domestic supplies include around 20 days of jet fuel, 24 days of diesel and 28 days of petrol. These numbers only account for fuel stored on land or in nearby waters. Australia operates just two refineries and imports the majority of its refined petroleum from Singapore, South Korea and Japan. The gradual closure of local refineries since the 1970s, combined with the country's dependence on diesel-powered road freight, deepens vulnerability.
A fuel shortage would affect most households. Supermarkets and pharmacies could experience supply delays or shortages, long-haul freight would encounter severe disruption and aviation would suffer significant setbacks. Some defence and energy experts believe Australia is highly exposed. They suggest that a foreign power could immobilise the country without military action by limiting access to fuel. Over the past decade, Australia's dependence on imported jet fuel has doubled, with more than 25% now sourced from China, adding another strategic concern.
Government representatives argue that recent domestic policies have secured Australia's fuel position. The Minimum Stockholding Obligation, introduced in 2021, includes stocks held in pipelines and offshore tankers. However, the IEA does not include these reserves in its compliance assessments. Officials claim these inventories would provide four to five weeks of protection during a global shutdown and last longer during partial disruptions.
Due to Australia's vast geography and its reliance on extended supply routes, it must proceed with caution. Some analysts believe there is enough flexibility to boost reserves in a crisis, but others argue that the government has not sufficiently determined the level of domestic stock needed to meet public and defence requirements in a long-term emergency. The discussion continues over whether higher onshore reserves should be considered a vital investment or an avoidable gamble.
