Australia has 36 days of petroleum reserves. That’s it. If the shipping lanes through the South China Sea were disrupted tomorrow — by a conflict over Taiwan, a natural disaster, or a diplomatic standoff — the country would have roughly five weeks before the trucks stopped running, the planes stopped flying, and the military ran dry. For a nation that imports over 90 percent of its refined fuel, this isn’t a theoretical concern. It’s a national security crisis hiding in plain sight.
The IEA 90-Day Standard
The International Energy Agency requires member nations to maintain [1] in strategic reserves. This obligation has been in place since the 1974 oil crisis, when OPEC’s embargo demonstrated how quickly energy dependence could cripple Western economies.
Australia is [2]. Not by a small margin — by more than half. While countries like Japan maintain 190+ days of reserves and the United States holds over 400 days in its Strategic Petroleum Reserve, Australia has allowed its stockholding to deteriorate to levels that would be considered reckless for a nation of its economic significance.
The standard response from successive federal governments has been to point to “tickets” — agreements with the US and other nations to release oil in an emergency. In 2020, Australia purchased oil tickets from the US Strategic Petroleum Reserve, storing Australian-owned oil on American soil, 15,000 kilometres away. The absurdity of this arrangement should be self-evident: in a genuine supply crisis affecting the Indo-Pacific, the likelihood of that oil making it to Australian refineries in time to matter is negligible.
One Nation’s Position
Whatever you think of Pauline Hanson and One Nation, their position on fuel security is substantially correct. One Nation has consistently advocated for mandatory strategic fuel reserves on Australian soil, calling for a minimum 90-day stockholding in line with IEA obligations.
Their policy platform includes several concrete proposals: construction of government-owned fuel storage facilities at strategic locations across Australia, incentives for domestic refining capacity to reduce import dependence, and mandating that fuel importers maintain minimum stockholdings rather than relying on just-in-time supply chains.
These aren’t radical proposals. They’re baseline measures that virtually every other developed nation implemented decades ago. The fact that One Nation is among the few political parties willing to make fuel security a headline issue says more about the failures of the major parties than it does about One Nation.
Australia’s Refining Collapse
The fuel security picture has deteriorated sharply in recent years. Australia once had [3]. Today, only two remain: Lytton in Brisbane and Altona in Melbourne. The closures of refineries at Kurnell (2014), Clyde (2012), Bulwer Island (2015), and Kwinana (2021) have left Australia almost entirely dependent on imported refined petroleum products from Singapore, South Korea, and Japan.
The [4] commissioned by the Morrison Government in 2019 acknowledged the risks but produced recommendations that were, charitably, inadequate. The review suggested “market-based approaches” and voluntary industry commitments — the same approaches that had allowed the situation to deteriorate in the first place.
The Fuel Security Services Payment introduced in 2021 provides subsidies to keep the remaining two refineries operating, but does nothing to address the fundamental vulnerability: Australia cannot refine enough fuel domestically to sustain itself for even a week without imports.
The Supply Chain Vulnerability
Australia’s fuel import supply chain is concentrated through a handful of chokepoints. The vast majority of refined fuel arrives via tanker through the Strait of Malacca and the South China Sea — waters where Chinese territorial claims, military exercises, and geopolitical tensions create persistent risk.
A [5] found that a disruption to these shipping routes could see Australian fuel supplies critically depleted within two to three weeks — well before any emergency measures could take effect. The study noted that Australia’s commercial fuel infrastructure operates on a just-in-time basis, with service stations typically holding only three to five days of supply.
During the COVID-19 pandemic, disruptions to global shipping demonstrated how fragile these supply chains really are. The 2021 Suez Canal blockage, while not directly affecting Australia’s primary fuel routes, illustrated how a single chokepoint failure can cascade through global energy markets within days.
The Political Failure
The bipartisan failure on fuel security is remarkable. Labor has historically shown little interest in strategic fuel reserves, prioritising renewables investment and electric vehicle adoption as the long-term solution to petroleum dependence. The Coalition, despite rhetoric about national security, failed to deliver meaningful action during nine years in government between 2013 and 2022.
The problem with the “electric vehicles will fix it” argument is timescale. Even under the most optimistic adoption projections, ICE vehicles will dominate Australian roads until at least 2040. The military runs on jet fuel and diesel. Agricultural machinery runs on diesel. The freight network runs on diesel. There is no electric replacement for any of these within the next 15 years.
Meanwhile, the current fuel reserve sits at roughly 36 days of consumption equivalent, less than half the IEA minimum. Every month that passes without action is another month of accumulated strategic risk.
What Actually Needs to Happen
The solution is neither complicated nor particularly expensive relative to the risk it mitigates. Australia needs:
Government-owned strategic reserves. Not tickets held in American salt caverns. Physical fuel — diesel, jet fuel, and petrol — stored in Australian facilities at geographically distributed locations. The US built its Strategic Petroleum Reserve for roughly $4 billion (in today’s dollars). Australia’s economy is roughly one-fourteenth the size; a proportional investment of $300-500 million would establish a meaningful reserve.
Refining capacity protection. The remaining two refineries must be maintained as a matter of national security, not market economics. If subsidies are required, so be it. The cost of maintaining refining capability is trivial compared to the economic impact of running out of fuel.
Mandatory stockholding obligations. Fuel importers should be required by law to maintain minimum inventory levels, as is standard practice in most OECD nations. The current voluntary approach has demonstrably failed.
Supply chain diversification. Reducing dependence on the Strait of Malacca route by securing alternative supply arrangements with producers in the Middle East, Africa, and the Americas.
Pauline Hanson has been saying this for years. The fact that mainstream politics has ignored fuel security until it became a crisis-in-waiting is a damning indictment of the major parties’ inability to think beyond the electoral cycle.
Australia’s 36-day fuel reserve isn’t just below the IEA standard. It’s a bet that nothing will go wrong in the most strategically contested waters on the planet. That’s not energy policy. That’s gambling.