Australia’s Strategic Vulnerability at Sea Cannot be Ignored by the re-elected Government
By Desmond Woods*
“When this problem could have been solved it was ignored. Now that it is thoroughly out of hand we propose to apply, too late, the measures that would have prevented it.” – Winston Churchill
Provided we can import fertilizer and fuel for agricultural machinery, we should be able to feed our population of fewer than 30 million here on this island continent in time of interdiction of our sea lanes of communication. With enough renewables, large scale batteries and local gas used in combination, we should be able to generate the power to keep the lights on in our towns and cities. But we are currently far too dependent on the importation of refined fuel for road and rail transport and for our high intensity agriculture.
Quite separately from the debate about Australia achieving net zero emission by 2050 to combat global climate change, there is a separate but urgent and compelling strategic reason for Australians to burn as little oil in vehicles as possible. That is because the national economy is massively dependent on the importation of refined petrol. As at February 2025 90% of Australia’s petroleum products are imported by sea. Without that uninterrupted inflow parts of the national economy would start to grind to a halt in about a month. Erratic and unreliable distribution of food by road to supermarkets would be one of the first consequences of a national fuel crisis. The antisocial consequences of any perception of supermarket shortages were quickly seen during the Covid pandemic.
The glacially paced transition to move Australia’s cars, buses and commercial vehicles off petrol and diesel needs to be speeded up. It needs serious government incentives in place. Subsidising rooftop solar driven home batteries which charge up family cars is a good start. This is not just about reducing Australia’s home produced emissions, getting down the cost of power to consumers, or even just about cutting the high and rising government bill for our imported refined fuel. The transition away from an oil based transportation system is a strategically urgent priority because of the inherent vulnerability of our living on a vast island that imports its oil supplies for road and rail. All island states that are not self-sufficient in oil, and that is almost all of them, are vulnerable and share this problem. The bigger the island the bigger the problem. Australia potentially has a very big logistical problem because it operates on a market driven “just in time ‘distribution model for fuel .
Australia needs to place itself in a much stronger strategic position by greatly increasing how much of its refined fuel it holds onshore. That will be expensive because it will require the repatriation of our existing oil reserve to where it can be held and available for use and increasing the size of it. That is not an optional policy but a vital national task which cannot be ignored or deferred. The stakes are too high.
The immediate priority now is to build tank farms into which to repatriate the existing national strategic oil reserve onshore while building up those stocks significantly. Currently up to 714 million barrels of Australia’s Strategic Oil Reserve are held in US tank farms along the coastline of the Gulf of Mexico. The facilities to hold this large national stock need to be located near our ports and major cities, where road tankers can access the supply when needed. This may require dredging ports which currently are not deep enough to allow for full tankers to enter and discharge their cargoes.
If we leave our fuel storage where it is – on the USA’s Caribbean Coast – bringing it to Australia during a crisis, through the Panama Canal and across contested seas, could be considered by tanker owners to be too risky to attempt. Getting insurance for such tankers and their bulk fuel during a conflict is an issue that cannot be ignored. The national strategic reserve could become a stranded national asset effectively in US hands, not Australian.
The last two refineries remaining in Australia are located in Victoria and Queensland. Over the past decade, global energy giants like BP and Shell have either divested or closed petrol refineries across Australia. The light oil we produce in Australia needs to be mixed with heavier imported oil to make petrol and diesel. The two refineries left in Australia are unable to provide for our fuel needs from this homegrown product. We are not about to rebuild the missing refineries with taxpayers money, so we are always going to be heavily dependent on the movement of refined oil from Singapore. We should aim to provide the onshore storage to hold enough of this fuel for normal usage for three months, not the current estimated 35 days. All industrial societies will always need oil for lubrication and the home produced Australian supplies works well for that limited purpose.
Generating electrical energy, instead of importing it, and thereby minimizing Australia’s dependence on imported fuel coming in tankers across thousands of miles of ocean, would raise our national resilience in the face of the obvious possibility of interdiction of supply by enemy action, or the threat of it, at sea. Our extended Sea Lanes of Communication coming from the north and west, in wartime, will all need close defence. That is a nearly impossible task for the RAN and RAAF with their severely limited number of anti-submarine frigates and destroyers and the very limited range of our few Anti Submarine Warfare aircraft operating from WA and the Cocos Islands.
Our few longer range surface warships are likely to operate in wartime against ASW threats in our maritime zone and in choke points to our near north. They will not be available for long slow ocean passage escort duties for vulnerable tankers coming from refineries in Asia, far less from the Caribbean across the vast South West Pacific. Using a Hobart Class destroyer as a convoy escort would be like using a racehorse to pull a cart. If we cannot protect our tankers on long ocean passages it follows that the less bulk fuel we have to move and protect after the shooting starts the better. That is why electrification of as much as possible of our transportation fleet matters.
The vulnerability caused by distance from our suppliers is made more complicated because there is no guarantee that we could move our bulk oil reserves in a fleet of tankers if we needed to. We bring our fuel to our ports in ships we do not own, and therefore cannot control, because they do not sail under the Australian Red Ensign. They are not under our Government’s operational control.
That strategic ‘black hole’ also needs addressing as a priority for this re-elected government. Australia needs to build, buy outright or arrange to access on lease, a national tanker fleet able to be ‘taken up from trade’ when the government requires it. Some of those tankers need to fly the red ensign and be the first to respond to the national requirement. Some of them could be Fleet Auxiliaries also used by the Navy. This is the Royal Navy’s pattern. The UK’s Royal Fleet Auxiliary is a separate naval service from the RN. There is a case for building a similar service alongside the RAN.
But we are going to need much bigger tankers and more of them than naval auxiliaries. We need to know we can access some mega tankers which our government can deploy where and when they need to in wartime under the Australian Red Ensign . Approaching tanker self-sufficiency by this means will take time. But it must be commenced because it is not optional if we want certainty that we will have the hulls we need bringing our fuel oil when the demand for tankers spikes simultaneously as every country tries to stockpile fuel at home during an international crisis.
Importation of all bulk goods, including our fuel supply, faces another serious strategic vulnerability very close to home. Pre-positioned sea mines on our coastal sea routes, waiting to be remotely activated, are a sophisticated and potent method for an enemy to sink ships, including tankers, coming to Australia. Maritime choke points and approaches to main ports are obvious places to mine. Modern sea mines do not require contact with a target. They work by breaking a ship’s back with a pressure wave from below.
Australia is not well prepared to counter this deadly threat. Neither is any other maritime dependent ocean power. The protection of undersea cables from being severed in wartime is now a clear and present danger given what has been happening in the Baltic in the last two years. The RAN is currently losing rather than gaining mine warfare and mine clearance capability and the ability to detect and prevent sabotage on the sea floor.
By definition, when hostilities commence it is already too late for strategic actions that should have been taken in peace time. Before the war started, Winston Churchill when faced with the clear need for many more small warships to escort vulnerable convoys along Britain’s oceanic supply lines memorably said:
“When this problem could have been solved it was ignored. Now that it is thoroughly out of hand we propose to apply, too late, the measures that would have prevented it.”
Churchill’s exasperated observation is highly relevant to our current national strategic situation at sea. It is past time that both our expensive usage of fuel oil and our maritime vulnerability were addressed with urgency. Serious investment in Australia’s logistical resilience needs to be made during this incoming Labor Government’s term of office. Only the Federal Government can make the investment which will ‘prime the pumps’ for market investment in new shipping and an onshore fuel storage for the strategic reserve.
Doing nothing for another governmental term of office to address this ever more credible threat will risk an under prepared Australia facing a sudden national fuel emergency with unacceptable implications for the health and well-being of the Australian population and our petroleum dependent economy.
*Desmond Woods OAM (RAN, Retd) is an ANI councillor
