Australia, Singapore commit to oil and LNG cooperation

- Sydney (10 April)

Australian Prime Minister Anthony Albanese and his Singaporean counterpart, Lawrence Wong, will work to maintain the flow of refined oil and natural gas between the two countries because of ongoing maritime disruptions.

The Australian and Singaporean governments plan to support energy exports through improved coordination and consultation, import processing, and transparency, the two leaders said on 10 April.

Ministers from both countries will hold an Energy Ministerial Dialogue to finalise a legally binding protocol to the Singapore-Australia Free Trade Agreement related to economic resilience and essential supplies.

Australian producers account for 32% of Singapore’s LNG imports, while Singaporean refiners account for 26% of Australia’s refined fuel imports, Prime Minister Albanese said at a press conference earlier in the day.

Singaporean refiners get over two-thirds of their crude feedstock from countries in the Persian Gulf, which rely on the Strait of Hormuz, according to the US Energy Information Agency.

But ship movements through the Strait have collapsed since the start of the US-Israeli war in Iran. Tankers carrying about 45,000 tonnes of cargo crossed the maritime passage in March, down from 2.6 million tonnes a year earlier, estimates from the IMF’s Portwatch monitor show.

Singapore has partly dealt with Strait of Hormuz disruptions by buying crude oil from alternative producers, the country’s Home Affairs Minister K Shanmugam said on 7 April, in a speech to the island’s parliament.

But Singapore has had to pay higher-than-usual prices for oil, Shanmugam added. Brent crude futures prices rose from $72.87/barrel to $97.32/barrel (A$103.23/barrel – A$137.86/barrel) after the Iran war began, data from Trading Economics show.

Futures prices fell from $109.27/barrel to $94.75/barrel on 7 April, immediately after the US and Iran agreed to halt hostilities and reopen the Strait of Hormuz for two weeks, but have since increased because of continued disruptions.

Australian federal and state governments have taken steps to limit fuel price increases stemming from the war. The Federal Government halved Australia’s fuel excise from A$0.53/litre to A$0.26/litre for three months, with state government support, in early April.

The average price of unleaded 91 octane petrol in New South Wales – Australia’s most populous state – has consistently declined since the excise cut took effect. It reached A$2.21/litre on 10 April, down from A$2.50/litre on 31 March, but still up from A$1.73/litre over February.

By Avinash Govind