Australia, China move to ease fuel crunch

Australia and China have agreed to work together to facilitate jet fuel exports, in a bid to ease supply disruptions triggered by ongoing tensions in the Middle East, Australian officials said.

Speaking in Beijing, Foreign Minister Penny Wong confirmed that Chinese authorities are engaging with Australian businesses to support the resumption of jet fuel shipments. She described the development as an important initial step toward stabilising supply chains.

The disruption stems in part from the closure of the Strait of Hormuz, a critical global energy corridor through which roughly a fifth of the world’s crude oil passes. The situation has driven up fuel prices and placed pressure on energy supplies across the Asia-Pacific region.

China, a key exporter of refined fuels such as jet fuel and diesel, had paused exports at the onset of the conflict to prioritise domestic reserves. However, reports indicate that exports could resume as early as May, with major state-owned firms seeking the necessary approvals.

During meetings with Chinese Foreign Minister Wang Yi and Vice President Han Zheng, Wong highlighted the impact of supply disruptions on Indo-Pacific refineries and called for stronger trade balance between the two nations.

She stressed that Australia’s consistent supply of raw materials and food exports should be matched by reliable shipments of essential imports such as fuel and fertilisers, noting the interdependence of the bilateral economic relationship.

Wong also said discussions covered broader areas of cooperation and differences, including regional security and trade issues, as both sides seek to manage challenges while maintaining economic ties.

The potential resumption of Chinese fuel exports is expected to provide some relief to markets grappling with ongoing volatility linked to geopolitical tensions.