The Federal Government has struck a deal to underwrite fuel imports, allowing suppliers to buy additional cargoes from the global spot market without bearing the full financial risk, as Australia responds to renewed disruption in global energy flows over the past 24 hours.
The move follows escalating instability in the Middle East, with the Strait of Hormuz again impacted after briefly reopening, tightening global oil and fuel supply routes and reinforcing concerns about ongoing volatility despite a recently announced ceasefire.
Under the agreement, backed by Export Finance Australia, major importers including Ampol and Viva Energy can purchase fuel at above-normal market prices, with the Government absorbing potential losses if prices shift before delivery.
Prime Minister Anthony Albanese says the arrangement is designed to increase supply into the domestic market.
“This is not business as usual. Importantly, this is additional supply here in Australia that they will be able to source,” Anthony says.
The intervention enables companies to act quickly on short-notice cargoes, as sourcing expands beyond traditional Asian suppliers to include North America and other regions.
Minister for Climate Change and Energy Chris Bowen says the agreement allows companies to secure fuel that would otherwise be commercially unviable.
“This arrangement will enable the companies to take a purchase that would have been non-commercial and to go out and buy that fuel for Australians,” Chris says.
Fuel demand surged in recent weeks, with some suppliers reporting volumes up to five times normal levels. While demand has eased, it remains elevated, placing continued pressure on distribution networks.
Despite this, supply conditions are improving, with outages declining across several states. The Government says contracts are now secured “well into May”, providing short-term certainty for freight and logistics operators, though global uncertainty continues to pose risks.
