Australia’s export credit agency has been tasked with underwriting imports of fuel and other strategic goods, as the conflict in the Middle East continues to pose a serious threat to supply of critical commodities.
The Australian government has amended legislation giving Export Finance Australia (EFA) “new capabilities” aimed at giving fuel suppliers – including regional and independent companies – confidence to secure additional cargoes despite the disruption.
The initiative will also cover fertiliser imports, which have been interrupted due to the loss of gas and chemical inputs that historically transit the Strait of Hormuz, ministers said.
“While Australia’s fuel supply outlook remains secure over the near term due to the actions the government has taken to date, we have been clear: the longer this war goes the worse the impacts will be,” said energy minister Chris Bowen.
“Our government is undertaking every practical measure required to shield our nation from the worst of this global uncertainty.”
John Hopkins, the EFA’s managing director and chief executive, said the move “reflects the urgency of this situation and the important role that targeted financial intervention can play in safeguarding critical supply chains for Australian businesses and communities”.
Iranian attacks in the Strait of Hormuz have driven traffic to a near standstill, with only a handful of vessels per day granted permission to transit the vital trade corridor.
The result has been a severe drop in supply of LNG, chiefly from Qatar, as well as crude oil, petroleum products and fertiliser inputs, as well as price spikes across a range of commodities. Shipping and insurance costs have also risen.
Australian Prime Minister Anthony Albanese said in a televised address today that the conflict has caused the largest spike in fuel prices in history and urged people not to make unnecessary purchases.
Some petrol stations in regional parts of the country have reportedly run out of petrol in recent weeks, which the government has blamed on panic buying rather than a supply shortage.
While Australia is a major exporter of fossil fuels, it only has two oil refineries and heavily relies on imports of refined goods from countries such as South Korea and Singapore.
The amended legislation has also cemented government plans to establish a strategic reserve for critical minerals, enabling EFA to purchase, sell and selectively stockpile inputs for industries such as clean energy and advanced manufacturing.
The initial focus will be on antimony, gallium and rare earth elements, which are overwhelmingly produced in China but have increasingly been subject to export controls, raising concerns over long-term supply.
The strategic reserve will also support mining and processing operations within Australia, helping diversify supply chains and strengthen partnerships with allies, including Canada, Europe, Japan, South Korea, the UK and the US, trade minister Don Farrell said.
The country “has some of the world’s largest deposits of critical minerals and rare earths, well-established trade links and a reputation as a stable and reliable source of resources and energy to the world”, Farrell said, presenting a “golden opportunity” to boost domestic processing capacity.
