Australia Leverages LNG, Lamb, and Beef to Shore Up Diesel Shortages

Originally published on Forbes.com on April 17, 2026

An assertive country in the Asia-Pacific region has suffered a surge in diesel prices since the Iran War, but unlocks deals with Southeast Asian Countries.

Australia’s prime minister, Anthony Albanese, seems to be an effective deal-maker. When Albanese met with President Trump six months ago, they agreed to work with the Pentagon, Alcoa, and even Japan, to co-develop or expand rare earth resources that exist in abundance within Australia. The pipeline proposed was worth US$8.5 billion. Australia conceded that it would have to pay extra tariffs, even though they were already paying more tariffs than the U.S. was. Also, the previous AUKUS project to build new nuclear attack submarines in Australia, in collaboration with the UK and the U.S., was confirmed.

 After the tariff insecurity, came Venezuela and the promised takeover by the U.S. of the largest oil reserves in the world. More recent is the war with Iran, and the biggest energy insecurity since the two oil shocks in 1973 and 1979. Although a flimsy ceasefire is in place, only one week old, the Strait of Hormuz remains closed, and over 100 oil tankers and 30 LNG tankers are still awaiting safe passage through the Strait. This amounts to something short of 20% of the world’s oil and gas undelivered. China, India, and Southeast Asia are the main beneficiaries, including Australia.

Albanese Deal-making.

It’s in this context that Albanese is deal-making again on a world stage. He has cut deals with Singapore and Brunei. Brunei is a small, wealthy monarchy that was previously part of Borneo, and its main exports are oil and gas. Albanese leveraged Australia’s premier position in LNG, lamb, beef, and wheat agriculture. Wine wasn’t mentioned, but the country’s excellent wines would likely be part of the deal.

Malaysia supplies 14% of Australia’s diesel, 10% of its petrol, and 11 % of its jet fuel. On the other side of the deal, Australia provides most of Malaysia’s LNG and a substantial volume of agricultural goods—for example, 75% of its lamb and beef, and 60% of its wheat come from Australia.

Just yesterday, Prime Minister Albanese announced that 100 million liters in toto (630,000 barrels) of extra diesel would be coming to Australia from Brunei and South Korea. Many such shipments will be arriving as a result of a new government law in Australia. Essentially, the government would underwrite the cost of these shipments before the diesel is purchased by oil and gas companies within Australia.

Albanese said the extra diesel was bought by Viva Energy, an Australian oil company. In a twist of fate, the Viva oil refinery in Geelong, just out of Melbourne, caught fire on Wednesday night. Mr. Albanese was flying directly there to find out how much damage was incurred, but he implied its effect on diesel supplies in Australia could be significant. The Viva facility in Geelong is one of only two operational oil refineries in Australia, the other being in Brisbane.

Energy Security In Australia.

Despite Australia’s position as the No.3 exporter of LNG in the world, a recent report observed that crude oil fuels (like diesel and gasoline) and fossil electricity (coal and gas) are what the country depends most on for its energy security. But Australia is quite a bit short of self-sufficiency in these sectors.

Further, the report argued that Australia would be seriously affected by the blockade of the Strait of Hormuz. This makes sense as diesel prices are sky high in Australia, where energy security is all about crude oil fuels.

According to the latest figures from the Australian Institute of Petroleum, the national average price of diesel is A$3.13 per litre, up from A$1.80 before the war started (a 74% surge). Petrol prices have also jumped from A$1.71 to A$2.40 per litre (a 40% rise). Running from Victoria to Western Australia, across the Nullarbor Plain desert, one operator of road trains (which can be as long as an Olympic swimming pool) said, “Instead of me spending A$150,000 a month on fuel, I’m now spending A$300,000 a month.”