Australia will compel major liquefied natural gas exporters to reserve 20 per cent of their shipments for domestic use starting July 2027, Energy Minister Chris Bowen announced Thursday. The move aims to protect the country from global energy price swings triggered by disruptions in the Middle East. Major gas firms including Shell, Chevron and Woodside will be subject to the new rules, though the government insists existing export contracts will not be broken. "We've been acting to shield Australians from global energy shocks by investing in reliable, sovereign renewables and keeping more of the gas we need onshore," Bowen said. Australia is a top LNG supplier to Asia, providing about 40 per cent of Japan's needs and over 30 per cent of Singapore's, according to official data. The government cited geopolitical instability, including Iran's closure of the Strait of Hormuz, as a key factor in the decision. Prime Minister Anthony Albanese separately announced a national fuel stockpile of one billion litres on Wednesday. The new law will come as Australia faces fuel supply vulnerabilities due to its limited refining capacity and geographic isolation. Critics have urged higher taxes on LNG exports, but the government rejected the proposal last week. World oil prices fell Wednesday after former U.S. President Donald Trump suggested a potential end to the conflict with Iran.
The government says it won't break LNG contracts with Asian partners but still plans to force companies to keep 20% of exports at home, creating a contradiction in its messaging. If the fuel is already committed under contract, it's unclear how firms will meet both obligations without legal conflict. This could strain Australia's reputation as a stable energy supplier while doing little to insulate domestic consumers. The billion-litre stockpile adds a tangible buffer, but relies on a geopolitical situation that remains unpredictable.
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