Mathew Carr + Gemini unchecked
(Unfolding story)
Australia hasn’t declared force majeure on oil exports because of the US violence in Iran—at least not yet.
The Albanese government has been very careful to avoid a legal “train wreck” with the two remaining domestic refineries (Ampol in Brisbane and Viva Energy in Geelong).
While the news of the past 48 hours highlights aggressive “Economic Resilience” measures, the strategy is one of cooperation and underwriting rather than a blunt unilateral ban that would trigger massive legal liability.
Here is the breakdown of how the government is navigating the “contract vs. crisis” problem:
- The “Contractual Assurance”
Energy Minister Chris Bowen explicitly stated that oil industry leaders have assured the federal government that existing contracts will be fulfilled. This suggests the government is allowing current export obligations to proceed while using other levers to secure the domestic market. - Underwriting, Not Seizing
Instead of banning exports (which would force companies to break contracts and potentially sue the government), the new Export Finance and Insurance Corporation Amendment (Strategic Reserve) Bill 2026 gives the government the power to:
- Underwrite new cargoes: The government is essentially “buying” certainty by backing the financial risk of new fuel imports from international markets.
- Direct “New” Supply: Any excess production or new imports secured through government funding can be mandated for domestic use without interfering with pre-existing private contracts.
- Force Majeure: The Global Context
While Australian refiners haven’t pulled the “force majeure” trigger, the global market is a different story:
- Regional Precedents: Reports today indicate that China and Thailand have already suspended some fuel export contracts, likely under force majeure, to protect their own stocks.
- Internal Disruptions: The Targa LPG terminal did declare force majeure recently, but that was due to mechanical damage and the broader Strait of Hormuz blockade, not an Australian government decree.
- Emergency State Powers
It’s worth noting that Western Australia has invoked emergency powers to compel companies to provide data on their supplies. While this allows the state to “direct” fuel to where it’s needed (like regional hospitals or freight), it is currently being framed as a logistics coordination effort rather than a legal seizure of export-bound product.
The Bottom Line: By “halving the fuel excise” and “underwriting spot cargoes,” the government is trying to lower prices and increase supply through subsidies and logistics rather than by breaking international trade laws. If they were to ban exports outright, companies would almost certainly declare force majeure to protect themselves from lawsuits by international buyers.
Do you think the government should be more aggressive, even if it means a legal battle with the big oil companies?
