Australia Oil Imports Set to Soar

From Money Control

The world’s energy map is undergoing a historic shift. The biggest change centres on the US, which will increasingly curtail crude oil imports as its oil output surges on the back of the shale revolution. But another, if less noticed, major shift is occurring in Australia.

The island continent could soon overtake Indonesia as the biggest importer of refined products in the Asia-Pacific region, as old and high-cost refineries close and demand continues to rise strongly.

The rising reliance on oil imports is likely to be a boon for independent trading houses, such as Vitol, Glencore and Trafigura, and export-orientated refineries in Asia, including the Reliance-owned Jamnagar refinery in India, the world’s largest petrochemical complex.

“Australia is the biggest regional opportunity in years for the industry,” says a Singapore-based oil trader.

The shift comes as Royal Dutch Shell and Caltex announce the closure of two ageing refineries near Sydney, reducing at one stroke by almost a third the country’s refining capacity. As a result, the Australian government this week said “domestic refiners will produce just over half the fuel consumed” in the country. “The remainder will be imported.”

Australia consumes about 1m barrels a day of oil-refined products – on a par with a medium-sized European country such as the Netherlands. If the country imports half of its fuel requirements, as Canberra is now forecasting, it could easily surpass Indonesia’s fuel purchases of about 400,000 b/d – the largest in Asia and one of the biggest worldwide.

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