The Times Australia
The Times World News

.
The Times Real Estate

.

Conflict in the South China Sea threatens 90% of Australia's fuel imports: study

  • Written by Richard Oloruntoba, Associate Professor of Supply Chain Management, Curtin University
Conflict in the South China Sea threatens 90% of Australia's fuel imports: study

China’s sabre-rattling around Taiwan underlines the need for Australia to be prepared for conflict in the South China Sea.

With its growing navy and air force, and the bases it has built throughout the area, China is increasingly capable of disrupting shipping lanes crucial to Australia’s exports and imports.

Of particular concern is our reliance on liquid fuels imported via South China Sea shipping routes. This reliance has become more pronounced over the past few decades as all but two[1] local refineries have closed. So even while we export crude oil, we import about 90% of refined fuels.

Our research team was commissioned by the Department of Defence to analyse threats to Australia’s maritime supply chains throughout the Indo-Pacific region (the South China Sea and East China Sea).

We calculate a major conflict would threaten routes supplying 90% of refined fuel imports, coming from South Korea, Singapore, Japan, Malaysia, Taiwan, Brunei and Vietnam.

Even if the routes between these countries and Australia do not pass through the South China Sea, most of the crude oil these countries import to produce that refined fuel does.

Read more: Friday essay: if growing US-China rivalry leads to 'the worst war ever', what should Australia do?[2]

Previous analyses of vulnerability

Our analysis is the first commissioned by the Department of Defence on the specific threat of prolonged maritime supply chain disruptions due to conflict in the South China and East China seas.

It builds on broader analyses of supply-chain vulnerabilities, such as the Department of Energy and the Environment’s 2019 interim Liquid Fuel Security Review[3] and the Productivity Commission’s 2021 report[4] spurred by import shortages arising from the COVID-19 pandemic.

The 2019 liquid fuel security review determined Australia imports the equivalent of 90% of its refined fuel needs.

In 2018 just five Asian nations supplied 87% of fuel imports: South Korea (27%), Singapore (26%), Japan (15%) and Malaysia (10%) and Taiwan (9%). The balance came from India (6%), the Middle East (1%) and the rest of the world including Vietnam and Philippines (6%).

Shipping route vulnerabilities

Our analysis involved examining GPS traffic data for tanker and cargo ships throughout the South China Sea and East China Sea region.

It’s not just shipping routes between source countries and Australia that matter. It is where these countries import the crude oil they refine into petrol, diesel, jet fuel, marine fuel and kerosene.

More than 80% of crude oil imports for Singapore, South Korea and Japan come from the Middle East – passing through the narrow Malacca Strait that separates the Malay Peninsula from the Indonesian island of Borneo.

So while export routes from Japan and Korea to Australia can avoid the South China Sea, their import routes can’t.

Any prolonged closure of the South China Sea will force tankers to take alternative routes. With longer routes will come higher freight costs and tanker shortages. Flow-on effects to Australia are inevitable.

Planning and preparedness

As the 2019 liquid fuel security review noted, Australia is a global outlier in its approach to liquid fuel security. Comparable economies manage fuel security as part of their strategic capability.

Australia, by comparison, has chosen to apply minimal regulation or government intervention in pursuit of an efficient market that delivers fuel to Australians as cheaply as possible.

Until now, Australia’s strategic planning for conflict in the South China Sea has largely focused on military requirements. .

With China’s increasing military capability and belligerence, there is no longer room to be complacent about Australia’s lack of energy security.

A 2019 workshop[5] of engineering experts convened for the Department of Defence determined Australia would run out of liquid fuels within two months of a major prolonged import disruption.

This would have cascading effect on all sectors of the economy – crippling transport, harming food security and emergency services. Among other things, the experts warned a lack of diesel for back-up generators in hospitals and other buildings could be catastrophic in the event of a large-scale electricity outage.

Read more: Why China's challenges to Australian ships in the South and East China Seas are likely to continue[6]

There are five main options to reduce our vulnerability: diversify import sources; increase local refining capability; reduce dependence on fossil fuels; increase strategic reserves; and educate and prepare the population for possible shortages.

All will require government departments planning together with various industry sectors, including fuel retailers, refineries and import terminals, manufacturing, freight transport, maritime, defence, communities and other relevant stakeholders.

Read more https://theconversation.com/conflict-in-the-south-china-sea-threatens-90-of-australias-fuel-imports-study-188148

The Times Features

From Classic to Contemporary: 5 Timeless Costumes for Any Party

When it comes to dressing up for a costume party, you want to choose something that is not only fun but also memorable. Whether you're attending a Halloween event, a themed gathe...

Action Figures as Art: The Growing Trend of Custom Figures and Modding

Action figures have long been regarded as collectible items, valued by enthusiasts and fans for their connection to popular culture. However, in recent years, a growing trend has...

The Ultimate Guide to Securing Grants for Your Small Business in Australia

Running a small business in Australia comes with both opportunities and challenges. While it can be rewarding, funding your business through the early stages or periods of growth...

Men’s Guide to Styling Suits with Sweaters for the Ultimate Winter Look

Winter brings a unique set of challenges when it comes to maintaining a sharp and stylish wardrobe. While suits are a staple of a well-dressed man’s closet, staying warm during t...

Discover the Charm of a Girl's White Dress

Key Highlights Timeless elegance: White dresses feel pure and have classic charm. They are perfect for many types of events. Versatile styles: You can pick from lace, embroid...

Top Medical Grade Red Light Therapy Devices in Australia

Key Highlights Lumitter™ has advanced red light therapy devices that combine new ideas with wellness. Red light therapy helps lower pain and swelling and boosts skin health. ...

Times Magazine

The Essential Guide to Transforming Office Spaces for Maximum Efficiency

Why Office Fitouts MatterA well-designed office can make all the difference in productivity, employee satisfaction, and client impressions. Businesses of all sizes are investing in updated office spaces to create environments that foster collaborat...

The A/B Testing Revolution: How AI Optimized Landing Pages Without Human Input

A/B testing was always integral to the web-based marketing world. Was there a button that converted better? Marketing could pit one against the other and see which option worked better. This was always through human observation, and over time, as d...

Using Countdown Timers in Email: Do They Really Increase Conversions?

In a world that's always on, where marketers are attempting to entice a subscriber and get them to convert on the same screen with one email, the power of urgency is sometimes the essential element needed. One of the most popular ways to create urg...

Types of Software Consultants

In today's technology-driven world, businesses often seek the expertise of software consultants to navigate complex software needs. There are several types of software consultants, including solution architects, project managers, and user experienc...

CWU Assistive Tech Hub is Changing Lives: Win a Free Rollator Walker This Easter!

🌟 Mobility. Independence. Community. All in One. This Easter, the CWU Assistive Tech Hub is pleased to support the Banyule community by giving away a rollator walker. The giveaway will take place during the Macleod Village Easter Egg Hunt & Ma...

"Eternal Nurture" by Cara Barilla: A Timeless Collection of Wisdom and Healing

Renowned Sydney-born author and educator Cara Barilla has released her latest book, Eternal Nurture, a profound collection of inspirational quotes designed to support mindfulness, emotional healing, and personal growth. With a deep commitment to ...

LayBy Shopping