Australia, Singapore Agree to Keep Oil and Gas Flowing Amid Global Supply Crisis

Australia and Singapore yesterday agreed to maintain a continued flow of petrol, diesel, and liquefied natural gas (LNG) between the two nations, as Asian governments scramble to respond to the oil price shock created by the war in Iran.

In a joint statement yesterday, Prime Minister Anthony Albanese and his Singaporean counterpart Lawrence Wong said that their countries shared a “deep concern over the situation in the Middle East and its consequences for our region, such as the impact on energy supply chains and prices.”

“We are committed to working together to strengthen energy supply chain resilience, including by deepening regional co-operation, accelerating renewable energy transition, addressing unjustified import and export restrictions, and maintaining open trade flows,” they said in a statement.

“We call on other trading partners to join us in ensuring global energy supply chains are kept open, for the benefit of the security and prosperity of our peoples.”

The deal is just the latest arrangement that has been made by Asia-Pacific nations to address the oil supply crisis created by the war in Iran, which has effectively shut the Strait of Hormuz, cutting off around a fifth of the world’s oil and LNG supply. Asia is disproportionately reliant on energy exports from the Gulf, which supplies around 60 percent of the region’s crude oil imports and nearly a third of its LNG.

Both Australia and Singapore are highly dependent on energy imports. Nearly four weeks after the outbreak of the conflict, prices of petrol and diesel have spiked in both nations, and petrol stations across Australia have begun running out of certain grades of fuel, raising fears of possible petrol rationing. These concerns have been compounded by the news that six fuel shipments to Australia due after mid-April have been cancelled or deferred due to the global supply crunch.

In the current scramble to secure sources of energy, Australia and Singapore are natural partners given their warm bilateral relations – the two countries signed a Comprehensive Strategic Partnership 2.0 joint declaration last October – and their largely complementary energy needs.

While Singapore is a leading regional producer of refined fuels, it imports nearly all of its crude oil, around 70 percent of which comes from the Middle East. Singapore generates 90 percent of its electricity from imported natural gas, including both pipeline gas from Malaysia and Indonesia, and LNG, around 25 percent of which comes from Qatar.

Meanwhile, Australia imports more than 80 percent of its petrol, diesel, and jet fuel from overseas, mostly from South Korea, Singapore, Japan, South Taiwan, and Malaysia. At the same time, the country is a leading global exporter of LNG, which Australian officials have suggested will give the country considerable leverage in its bid to ensure a continued supply of petrol and other fuels from Asia.

As Assistant Foreign Affairs Minister Matt Thistlethwaite told Sky News this week, “we’ve got that advantage in that we can work with our neighbors in the Asia Pacific to ensure that they have access to their energy needs and we get access to ours.”

This is largely the basis of the undertaking between Albanese and Wong, and builds on the preexisting energy trade between the two nations. Australia was the leading exporter of LNG to Singapore in 2024, supplying 39.4 percent of the country’s needs that year, while Singapore is a key source of the transport fuels that power the Australian economy.

While the joint statement did not include any information about specific shipments and quantities, it makes sense that Australia would help Singapore fill its LNG shortfall in exchange for maintaining its supply of transport fuels to Australia.

The Singapore-Australia arrangement also suggests that geopolitical affinities and alignments may end up being a crucial component of how the global energy map is rearranged, especially if the restrictions on Middle Eastern energy persist beyond the short term.