Oil Deal

We don’t have enough fuel reserves. The International Energy Agency requires its 30 member countries to have a strategic petroleum reserve equal to 90 days of the previous year’s net oil imports. Australia has about 30 days of supply onshore and another 22 days’ worth making its way to Australia on tankers – well short of the IEA’s 90-day requirement.

So, with oil prices at a record low during the Corona Virus crisis our Angus goes out and buys $94 million worth of oil. Great work Angus, well done.  Sounds great but at that price it’s somewhere between 2.7 and 3.8 million barrels. Australia consumes about a million barrels a day, so $94 million worth will barely last a long weekend.

Another little problem…..we don’t actually get our oil, Angus stored it in the USA. When we want to get our hands on it it’ll take about 3 weeks to get here! Let’s hope we don’t need it in a hurry.

Unfortunately we don’t have the means to store unrefined crude oil here. Yep…you read that correctly. We’re one of the richest countries in the world and we can’t store crude oil. Besides, even if we could, we can’t refine it into fuel because we lack the facilities.

Anther minor issue – The Arrangement with the US Government is not a legally-binding, treaty-level agreement, instead it is a lesser “government-to-government” arrangement. We haven’t seen any details of the agreement as it’s “commercial-in-confidence”.

Newly released details about the so-called ‘Arrangement’ signed by Energy Minister Angus Taylor in March show it provides no real guarantee that Australia would be able to access strategic oil supplies during an international emergency” Senator Rex Patrick said. 

Further Reading:

Deal of the century or PR stunt? – https://www.abc.net.au/news/2020-05-01/australian-oil-buy-deal-of-the-century-or-dud/12202852

Strategic Oil Reserve Farce – https://rex.centrealliance.org.au/media/releases/strategic-oil-reserve-farce/

what is behind Angus Taylor’s $94 million US stockpile deal? – https://www.crikey.com.au/2020/04/29/angus-taylor-oil-deal/

Global oil price collapse is Australia’s gain, Angus Taylor says – https://www.smh.com.au/world/north-america/global-oil-price-collapse-is-australia-s-gain-angus-taylor-says-20200310-p548mp.html

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