One of the biggest dangers is that military conflicts in the Middle East turn into a tanker war.
Marlin Luanda with Russian (!!) Naphtha for Singapore hit by missile and on fire south of Aden 26 Jan 2024
Tanker trackers https://twitter.com/TankerTrackers/status/1751214167413961138
What’s going on with shipping? https://twitter.com/mercoglianos/status/1750998719905030579
So it is again time to look at Australian petroleum imports, which depend on Singapore but also other Asian countries.
In the last 12 months to November 2023 (the latest statistics) Australia imported jet fuel to the value of 6.8 bn AU$, a 64% increase over the same period in pre-Covid 2019. Data are from here:
https://www.energy.gov.au/publications/australian-petroleum-statistics-2023
Fig 1: Australian jet fuel imports in AU$
Fig 2: International jet fuel prices Jan 2016 – Jan 2024
https://www.iata.org/en/publications/economics/fuel-monitor/
Fig 3: Australian jet fuel imports and refinery production
Around 86% of jet fuel is imported. And the dependency of jet fuel from the last 2 Australian refineries on imported crude is 87%.
Fig 4: The steady decline of domestic fuel production due to refinery closures
13/4/2011 Australia’s fuel import vulnerability increases as Sydney’s Clyde refinery is closing
http://crudeoilpeak.info/australias-fuel-import-vulnerability-increases-as-sydneys-clyde-refinery-is-closing
27/7/2012 After Sydney’s refinery closure: Caltex to import fuel from Chevron’s shrinking sales
http://crudeoilpeak.info/after-sydney-refinery-closure-caltex-to-import-fuel-from-chevrons-shrinking-sales
9/4/2014 Why the closure of BP’s Brisbane Bulwer refinery reduces Australia’s energy security
http://crudeoilpeak.info/why-the-closure-of-bps-brisbane-bulwer-refinery-reduces-australias-energy-security
14/11/2020 Australia’s BP Kwinana refinery closure: peak oil context
https://crudeoilpeak.info/australias-bp-kwinana-refinery-closure-peak-oil-context
Remaining refineries:
Viva in Geelong (120 kb/d) https://www.vivaenergy.com.au/operations/geelong
and Ampol in Lytton (109 kb/d) https://www.ampol.com.au/about-ampol/news-and-media/lytton-refinery-to-continue
Fig 5: Australian jet fuel imports by country (12 month moving average)
Fig 6: Monthly jet fuel imports since Jan 2022
Let’s have a closer look at some of the countries from where jet fuels are imported.
China
Fig 7: Australian jet fuel imports from China
Fig 8: China’s crude imports by country 2017 – Apr 2023
Source: Kpler, May 2023 https://twitter.com/Kpler/status/1661748861583642631
China’s crude oil production started to peak in 2015. About half of Chinese crude imports are from the Middle East.
China’s Economic Stake in the Middle East: Its Thirst for Oil
Oct 11, 2023
China is the largest oil importer by far from Saudi Arabia and from Iran, highlighting the risk it faces if the war in Israel and Gaza were to broaden.
https://www.nytimes.com/2023/10/11/business/china-oil-saudi-arabia-iran.html
Exclusive: Iran’s oil trade with China stalls as Tehran demands higher prices
8 Jan 2024
SINGAPORE, Jan 5 (Reuters) – China’s oil trade with Iran has stalled as Tehran withholds shipments and demands higher prices from its top client, tightening cheap supply for the world’s biggest crude importer, refinery and trade sources said.
The cutback in Iranian oil, which makes up some 10% of China’s crude imports and hit a record in October, could support global prices and squeeze profits at Chinese refiners.
The abrupt move, which one industry executive called a “default”, could also represent the backfiring of an October U.S. waiver on sanctions of Venezuelan oil, which diverted shipments from the South American producer to the U.S. and India, elevating prices for China as shipments dwindled.
https://www.reuters.com/business/energy/irans-oil-trade-with-china-stalls-tehran-demands-higher-prices-2024-01-05/
South Korea
Fig 9: Australian jet fuel imports from South Korea
Fig 10: South Korean crude imports by country
In the last 2 years, South Korea’s dependency on the Middle East was 70%.
Fig 11: South Korean refinery output
Singapore
Australians think that fuels are mainly imported from Singapore and that therefore there is no problem. So let’s have a look at Singapore’s oil hub.
Fig 12: Singapore oil imports from 2 different sources of data
Data from Singapore’s Energy Market Authority are here:
https://www.ema.gov.sg/resources/singapore-energy-statistics/chapter1
BP Stat. Review’s data from the inter area movements are slightly different but show the same trend.
Crude and product imports peaked in 2017, mainly because of the peak in product imports.
What matters here of course are Singapore’s exports which peaked in 2017:
Fig 13: Singapore’s petroleum product exports
The peak was mainly caused by fuel oil but jet fuel exports also had a peak in 2017.
Fig 14: Singapore jet fuel imports and exports
We can clearly see that both imports and exports peaked around the oil price shock year of 2008 with smaller peaks in 2017.
Fig 15: AU jet fuel imports compared to Singapore jet fuel exports
Australia tries a business as usual import path thereby bumping into Singapore’s declining trend.
This change is quite important and concerning because rather short and secure supply chains from Singapore are moving further north through the contested South China Sea, the sea lanes around Taiwan and to South Korea under threat from missile attacks. 30% of imports depend on CCP decisions.
Summary
Fig 16: Australia jet fuel import dependencies by country
Government action
So what is the government doing to reduce Australia’s dependency on jet fuel imports? The opposite of what you expect. A 2nd Sydney airport is under construction with additional demand for jet fuel.
Fig 17: Estimate of jet fuel demand for the new Western Sydney Airport by Deloitte
For 2031 this would be 48 ML per month or an increase of Australia’s total jet fuel imports of around 10%. The estimate for 2052 is academic (+245 ML per month). No one calculated where the jet fuel imports will come from. Happy flying.