Australia is one of the world's biggest energy exporters, yet most of the fuel we put in our cars is imported. So is Australia an oil-exporting country or not? The short answer is that it is both an oil exporter and a fuel importer at the same time. In an SBS Chinese interview, Raymond Chan, Private Client Adviser and Head of the Asian Desk at Morgans, unpacks why this apparent contradiction makes complete sense once you separate crude oil from refined fuel.
Key takeaways
- Australia is an oil exporter because it sells crude oil and condensate overseas, but it still imports most of its refined petrol, diesel and jet fuel.
- The difference comes down to crude oil (unprocessed) versus refined fuels (the finished products we use every day).
- Australia produces light, sweet crude that Asian refineries pay a premium for, so it is often more profitable to export it than to refine it at home.
- Only two oil refineries remain in Australia, down from eight around two decades ago, which is why import reliance has grown.
- For investors, the crude-versus-fuel split matters for understanding energy security, fuel prices and where the opportunities sit across the energy sector.
The oil paradox: exporter and importer at once
It sounds like a riddle. How can a country export oil and import fuel at the same time? The answer is that "oil" is not a single product. Crude oil is the raw material pumped out of the ground or seabed. Refined fuels such as petrol, diesel and jet fuel are the processed products made from crude oil at a refinery. Australia sells a lot of the former and buys a lot of the latter.
Australia produces around 320,000 barrels of crude oil and condensate a day, and the overwhelming majority of it is shipped overseas. In recent years roughly 96% of Australia's crude oil and condensate has been exported. At the same time, Australia imports the bulk of the finished fuel it actually consumes. So yes, Australia is genuinely an oil-exporting country. It is simply not a fuel-self-sufficient one.
Why Australia exports its crude oil
The crude oil produced off Australia's North West Shelf is mostly light and sweet, meaning it has a low density and low sulfur content. This grade is highly prized by refineries in Asia because it is cleaner and cheaper to process into high-value products. As a result, Australian light sweet crude tends to command premium prices in markets such as Japan, China and South Korea.
Here is the commercial logic Raymond highlights in the interview. If Australian producers can sell their premium crude to Asian buyers at a strong price, and Australia's remaining refineries are not necessarily configured to run that exact crude efficiently, exporting the crude and importing refined fuel can be the more economic outcome. It is the same principle behind a lot of global trade: sell what you produce best, buy what others produce more cheaply.
Why Australia still imports most of its fuel
The other half of the story is refining capacity. Around twenty years ago Australia had eight domestic oil refineries. One by one, most were deemed uncompetitive against the enormous, modern refineries built across Asia. Today only two remain: Ampol's Lytton refinery near Brisbane and Viva Energy's refinery in Geelong.
With far less domestic refining capacity, Australia now imports a large share of its refined products. Recent industry figures put refined fuel imports at roughly 850,000 barrels a day against total demand of about 1.1 million barrels a day. That leaves the country reliant on overseas suppliers for something like 80 to 90% of the refined fuel it uses. South Korea alone supplies around a quarter of Australia's fuel imports, a large portion of it diesel, which is the fuel that keeps trucks, trains, mines and farms moving.
Crude oil versus refined fuel: the key difference
What this means for energy security and fuel prices
Being an energy exporter does not automatically make a country fuel secure. Because Australia imports most of its refined fuel and holds relatively low domestic stockpiles, local pump prices are heavily influenced by international refining margins, shipping, global crude benchmarks and the Australian dollar. When any of those move, motorists usually feel it within weeks.
It is worth remembering that oil is only one part of Australia's energy export story. Australia is also one of the world's largest exporters of liquefied natural gas (LNG), ranking among the top three globally alongside Qatar and the United States. So when people call Australia an energy-exporting nation, they are largely right. The nuance Raymond draws out is that strength in exporting crude oil and gas sits alongside a genuine dependence on imported refined fuel.
Why this matters for investors
For investors, the crude-versus-fuel distinction is more than trivia. It shapes how different parts of the energy sector behave. Upstream producers benefit when crude and condensate prices are strong. Fuel retailers and refiners are exposed to refining margins and import costs. Energy security debates can influence government policy, subsidies and infrastructure decisions that flow through to company earnings.
Understanding these moving parts helps investors look past the headlines and ask better questions about where value and risk actually sit. That is exactly the kind of perspective the Morgans Asian Desk aims to bring to clients navigating global energy and commodity markets.
Watch the full SBS interview
Raymond Chan discusses Australia's oil export paradox, energy security and fuel prices in detail in his interview with SBS Chinese. The interview is conducted in Cantonese.
Watch the full interview here: https://www.youtube.com/watch?v=L3o3a8fQ4Kw
Frequently asked questions
Is Australia an oil-exporting country?
Yes. Australia is an oil-exporting country because it produces and exports crude oil and condensate, most of which is sold to refineries in Asia. However, it still imports the majority of the refined petrol, diesel and jet fuel that Australians use, so it is an oil exporter and a fuel importer at the same time.
Why does Australia export crude oil but import petrol?
Australia's crude oil is mostly light and sweet, a premium grade that Asian refineries pay high prices for. With only two refineries left domestically, it is often more economic to export the crude and import finished fuel rather than refine everything at home.
How many oil refineries does Australia have?
Australia has two operating oil refineries: Ampol's Lytton refinery near Brisbane and Viva Energy's Geelong refinery. Around twenty years ago there were eight, but most closed because they could not compete with much larger Asian refineries.
Is Australia's fuel supply secure?
Australia imports roughly 80 to 90% of its refined fuel and holds relatively low stockpiles, so its fuel supply is exposed to international disruptions, shipping and export curbs from supplier countries. This is why energy security is an ongoing policy discussion.
Does exporting oil make fuel cheaper in Australia?
Not necessarily. Local pump prices are set largely by international refined-fuel prices, refining margins, shipping costs and the Australian dollar, rather than by how much crude Australia exports. Being an oil exporter does not shield motorists from global fuel price swings.
Speak with the Morgans Asian Desk
Australia's role as both an oil exporter and a fuel importer is a useful reminder that energy markets are more nuanced than the headlines suggest. Separating crude oil from refined fuel helps explain everything from export earnings to the price you pay at the bowser, and it opens up a clearer view of where the risks and opportunities lie across the energy sector.
If you would like to understand how global energy and commodity trends could affect your portfolio, the Morgans Asian Desk and our advisers are here to help. Contact Morgans to speak with an adviser today.
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DISCLAIMER: Information is of a general nature only. Before making any financial decisions, you should consult with an experienced professional to obtain advice specific to your circumstances.
