Australian Foreign Minister Penny Wong travelled to China, Japan, and South Korea this week on a trip triggered by the conflict in the Middle East and Australia’s energy vulnerabilities.
Wong’s colleague, Defence Minister Pat Conroy, warned Australians of “challenging times ahead,” blaming the country’s “energy crisis” on the snarled Strait of Hormuz.
South Korea supplies Australia with significant amounts of diesel, while one-third of Australia’s international purchases of jet fuel come from China.
On Sunday, Australia's energy and climate minister revealed that the country’s energy reserves amounted to 44 days' worth of gas, 33 days of diesel, and 30 days of jet fuel — well short of the International Energy Agency’s 90-day standard. Australia is home to only two oil refining facilities, down from eight in 2000.
The price of Brent crude, a global oil benchmark, has jumped 58 per cent since the U.S.–Israel attack on Iran.
Energy, unbalanced
Australia is the world’s third-largest exporter of liquefied natural gas (LNG) and is a key supplier for Japan (38.2% of LNG imports) and South Korea (24.6%). But Australia remains heavily dependent on imported oil and refined fuels; only four per cent of fuel used in Australia is Australian crude refined domestically.
This lopsided profile — LNG superpower on the export side, vulnerable oil importer on the import side — is increasingly shaping Canberra’s foreign policy calculations (e.g. Wong including China on her trip) and Australian domestic politics more broadly. On Monday, opposition leader Angus Taylor pitched a doubling of Australia’s minimum fuel reserves, at a cost of one cent per litre at the pump.
Foot on the gas
Canada is the world’s fourth-largest crude oil producer and is increasingly shipping its oil to non-U.S. markets, with China accounting for 10 per cent of total Canadian oil exports in November 2025.
LNG is a different story; as of last month, Canada was ranked 19th out of 24 LNG-exporting countries in terms of output. But momentum is growing; last week, Ottawa greenlit a C$4-billion expansion to Enbridge’s Sunrise natural gas pipeline in B.C. Some of the capacity tied to the expansion “will no doubt go offshore,” according to an Enbridge official.
What’s more, on Monday, Shell acquired Canada-based ARC Resources for US$16.4 billion. The move may presage an expansion of the LNG export facility in Kitimat, B.C., owned by Shell and four Asian companies. That facility has seen an uptick in interest from Asian buyers.
Canada’s revitalized Indo-Pacific diplomacy is largely tied to energy; a January meeting between Canadian Prime Minister Mark Carney and Chinese President Xi Jinping was framed around collaboration on energy, agri-food, and trade. Carney also signed a Strategic Energy Partnership with Indian Prime Minister Narendra Modi in March, centred around LNG, liquefied petroleum gas, uranium, solar, and hydrogen.
