Australia Weighs Refinery Revival Amid Global Energy Security Concerns

The Iran war has sparked a renewed focus on energy security for nations that import fuel. The conflict, which closed the Strait of Hormuz and disrupted global crude supplies, has highlighted the need for these countries to reduce their dependence on fossil fuels.

Australia is one such nation. As the world's leading diesel importer, it relies on imports for about 80% of its liquid fuel needs. The country imported around 861,000 barrels per day (bpd) of light and middle distillates in 2025, with diesel accounting for about 60% of that.

The Australian government has recently announced a $4 million pre-feasibility study for a new oil refinery, which would be the first such plant in 60 years. However, building a modern refinery requires a capacity of at least 300,000 bpd and would likely cost substantially more than a similar-sized plant being built in Ghana, estimated to cost around $12 billion.

Another option is for Australia to accelerate electrification, particularly in the mining and agricultural sectors. Fortescue Metals Group, one of Australia's largest iron ore miners, has already begun transitioning to electric vehicles and renewable energy generation, which it says provides a net annual benefit of $1.2 billion over using diesel power.