Oil

The way out

The answer isn’t to defend the lanes — it’s to make the fuel here.

Australia imports about 90% of its refined fuel, holds the developed world’s thinnest reserve — barely 30 days of diesel against the IEA’s 90 — and pays on the order of $59 billion a year for the arrangement. Imported fuel is only “cheap” on a calm day. From here there are two paths: stay a price-taker on imported fuel, or make it here and export the surplus. Australia’s Transport Fuel Problem and The True Cost of “Cheap” Imported Fuel set out why the second path is not only safer but cheaper. The SBC is how it gets built — in five moves.

1 · Cut the demand we can

The largest single line in the oil-import bill is freight diesel, and it moves onto the corridor’s electrified rail. Passenger, mining and farm fleets electrify; high-speed rail takes much of the domestic aviation task. An all-electric passenger fleet alone would replace roughly a third of Australia’s imported oil with domestic electricity. One policy pulls the wrong way: the Fuel Tax Credit rebates around $10 billion a year of off-road and heavy-vehicle diesel, keeping imported fuel artificially cheap — redirect it toward electrification and domestic fuel and the switch pays for itself far faster.

2 · Grow the fuel that’s left

What can’t be electrified — long-haul aviation, shipping, heavy industry — is made from what the country grows. Australia already grows fuel: the 2025–26 canola harvest alone is worth on the order of 2.2 billion litres of biodiesel — about a month of national diesel, needing no tanker, no chokepoint and no foreign government’s permission. Reserve half of each year’s crop for domestic processing and that is a standing 18–22 days of diesel, every year — before the renewable diesel and sustainable aviation fuel the world is short of and pays a premium for. The feedstock is here; the processing is the gap to close.

3 · Drill, explore and refine our own

The claim that Australia has no oil is a claim about price, not geology — and it is undercut by the fact that the country stopped looking. Dorado, off the Pilbara, was the largest oil discovery in Western Australia this century, found in 2018 in the barely-drilled Bedout Sub-basin — some seventeen exploration wells against more than fifteen hundred in the basin next door — by a well that was chasing gas. It is light, low-emission crude, headed for first oil around 2026, and it is not alone: the same sub-basin holds further leads, and the Great Australian Bight remains essentially untested. A serious, sovereign exploration effort across the frontier basins is overdue and should begin now. And the oil it finds need not leave the country to be refined: modular refineries — skid-mounted units built in under a year, at a fraction of a legacy plant’s cost and matched to exactly the light condensate Australia produces — can process it here, ending the absurdity of shipping raw crude out and buying refined fuel back.

4 · Hold the bridge

While the transition runs, a real 90-day strategic reserve — built to the IEA standard Australia alone among members has failed for over a decade — holds the country through a shock. It is not the answer; a bigger tank still holds a fuel the country doesn’t make. But it is the prudent bridge until the demand is gone.

5 · Become a net exporter

Self-sufficiency is the floor, not the ceiling. Australia already ships out raw crude, gas and coal and buys refined fuel back — handing the value-adding middle to others and keeping the strategic risk for itself. Flip it: cut the demand, make the rest at home, and turn what the country produces beyond its own needs into exports of finished and clean fuels to a region that will need them. From importing finished fuel to manufacturing and selling it — the developed world’s thinnest reserve turned into one of its most secure.