Famous last words? An article published by The Australian Institute of Petroleum in 2017 makes a case that Australia’s fuel supply is fine despite being import dependent. (AIP, 2017) The AIP explicitly argues against the construction of new refineries for a few reasons; the two refineries that Australia operates can’t compete with Asian refineries who have major cost, scale, government and technology advantages.

“Refinery closures in Sydney and Adelaide have seen no adverse impact on those fuel markets, either in terms of supply reliability or price to consumers.”

Secondly, the AIP argues that “transport fuel security depends on flexible supply chains and diversity of product supply, not domestic refining of domestic crude oil.”

Lastly, the AIP mentions the cost to taxpayers would be substantial to construct a new refinery, and there would be high coastal shipping costs.

This article is pre the actual refinery closures of 2021 (Hutchens, 2021) and well before the current Middle East conflict. Famous last words.

An article published in 2021 by ABC News Australia argues the opposite; “having fewer refineries reduces Australia’s ability to refine fuels if shipping and supply chains are ever severely disrupted for any reason in the future.” (Hutchens, 2021) (Why did you say that? You jinxed us!)

The following is written based on an article by Alan Kholer at ABC News Australia. (Alan Kohler, 2026)

In the beginning of 2012, Iran started enriching uranium to 20 per cent purity at a reinforced underground facility in Qom, 156 kilometres south of the capital, Tehran. The US and Europe were, at the time, alarmed at this and responded with heavy sanctions. The Central Bank of Iran had its assets frozen and it was disconnected from the SWIFT global banking network. Europe banned imports of Iran’s oil (which had been 20 per cent of Iran’s exports), European insurance companies were banned from insuring Iranian tankers and the US said it would not do business with any country that imported Iranian oil. Amidst plenty of countries holding firm against Iran, Iran agreed three years later to limit enrichment to 3.67 per cent and pause its nuclear weapons program for at least 10 years under the Joint Comprehensive Plan of Action (JCPOA).  This was at the same time Australian refineries closed, leaving two still standing. Everything seemed ok; Iran was compliant, the gulf remained open, and there was a glut of oil. The price of crude oil fell to an 11 year low of US$36.05 in 2015. However, the JCPOA worked until it didn’t. In 2018, Trump cancelled the JCPOA, reimposing all the previous sanctions on Iran, saying it was the “worst deal ever negotiated.” Some argue Trump pulled out because it was signed by former US president Barack Obama, but Trump had a point according to ABC News Australia. The JCPOA only lasted until 2025, it didn’t prevent long range ballistic missiles and gave Iran a cash “windfall” that it could spend on Hamas and Hezbollah. After Trump pulled out, Iran abandoned the 3.67 per cent purity limit on uranium enrichment and went for it. Five years later, the International Atomic Energy Agency found uranium particles enriched up to 83.7 per cent, close to 90 per cent required to make a bomb. Six months later, the Iran funded Palestinian group Hamas went into Israel and murdered 1,200 people. In response, Israel destroyed most of Gaza. In June of last year, Trump dropped “bunker-busting bombs” on Fordo, an Iranian uranium enrichment facility, just outside of Qom. He declared the facility had been “obliterated,” but on February 28 this year, they had to go and obliterate it again, as well as a school full of children and buildings in Tehran.

“Regime change” was the primary objective of the US and Israel (but it seems far out of reach without a full scale American invasion of Iran, which seems unimaginable even for Trump).

Now? Well, the Strait of Hormuz is a “lever of leverage” and a political hot potato. From February 28, the Strait is mostly closed. Only 5 per cent of the normal traffic can access the narrow passageway, because either insurance has been cancelled for ships or because shipping companies don’t want to risk being obliterated by Iran who threatened to “set ablaze” any ship who dares enter.

Shortly thereafter, maritime insurers issued cancellation notices for the Persian Gulf which bolted it. This has left the world into its ninth week with Hormuz closed, one of the largest supply shocks in history. (Trading Economics, 2025) Australia has 30 days, 33 days, and 44 days for jet fuel, diesel and petrol respectively in reserves as of 30 April. (Aussie Oil Watch, 2026)

Per Alan Kholer, “inflation is bad, but the absence of fuel is crippling.”