Australia has announced plans to compel major gas producers to reserve part of their fuel supplies for domestic consumption as the government moves to protect households and industries from worsening global energy instability.
Energy Minister Chris Bowen said on Thursday that large gas exporters would be required to keep 20 per cent of their liquefied natural gas (LNG) production within Australia instead of shipping it abroad.
The decision comes as international energy prices continue to fluctuate sharply following tensions in the Middle East and disruptions linked to the conflict involving Iran, Israel and the United States.
Australia remains one of the world’s biggest LNG exporters and a critical supplier to several Asian economies heavily dependent on imported gas.
According to Bowen, the new policy is designed to reduce the country’s exposure to international market shocks and guarantee energy security for Australians.
“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 told reporters.
Under the proposal, gas companies operating in Australia would be forced to ring-fence part of their exports for local consumers, an amount equivalent to one-fifth of overseas shipments.
The government said existing export agreements would not be affected by the policy.
“We will not disturb any existing contracts,” Bowen stated.
“We have consulted closely with trading partners to ensure that it’s well understood around the world that Australia will always be a reliable supplier of energy.”
The reservation scheme is expected to become law by July 2027 if approved by parliament.
Australia supplies large volumes of LNG across Asia, particularly to countries facing rising energy demand and supply uncertainty.
Industry figures show that nearly 40 per cent of Japan’s LNG imports come from Australia. Government data also indicates that more than 30 per cent of Singapore’s LNG supply is sourced from Australia.
The announcement followed mounting concerns over global fuel supply disruptions after Iran effectively halted a significant portion of fuel shipments through the strategically important Strait of Hormuz.
With only two operational oil refineries and its geographic isolation, Australia is considered highly vulnerable to interruptions in international fuel supplies.
Prime Minister Anthony Albanese had earlier announced plans for a national fuel reserve containing one billion litres in a bid to strengthen the country’s emergency preparedness.
Major energy firms operating in Australia, including Shell, Chevron and Woodside Energy, earn substantial revenue from LNG exports to international buyers.
The government has recently faced increasing pressure from critics and advocacy groups demanding higher taxes on gas exports and stronger controls on energy companies.
However, Canberra rejected proposals for major export tax increases last week.
Meanwhile, global oil prices fell on Wednesday after remarks by U.S. President Donald Trump raised hopes that tensions with Iran could ease, potentially reducing fears of prolonged disruption in world energy markets.
