Australia has been pleading with its Asian suppliers to not restrict petroleum exports at this critical time. But how will Asian partners respond, given Australian Government policy is to restrict LNG exports to Asia? And increase the tax burden on the industry. The inconsistency of Australian policy may raise doubts for allies.
For decades, key Asian alliances have been built on Australia’s role as a reliable energy supplier. Energy-poor nations like Japan and Korea have long understood the fragility of international supply lines, so have invested in Australian energy to protect their economic security.
In the gas industry, Japan in particular has directly invested in LNG projects, and signed the long-term sales contracts to make those projects bankable. Asian buyers prudently spread their risk by contracting with other supplier nations, understanding that in the event of a supply shock, Australia will have their backs.
Damage to Qatari infrastructure and longer-term risks to LNG shipping should put Australia in the box seat to grow its exports through new and expanded gas projects.
But in recent years, Asian allies have been growing concerned about Australia “quietly quitting gas”, and their fears will only intensify. The government is imposing stricter domestic gas obligations. The upcoming Safeguard Mechanism review will consider greater abatement costs on gas projects. And further increases to gas taxes have been discussed.
Amidst all of these threats, the Australian Government is imploring Asian refining nations to not restrict exports of petroleum products to Australia. Asian allies may view these pleas as somewhat ironic.
To demonstrate good faith in securing petroleum supplies from Asia, the Australian Government should take five key steps.
First, Australia has taken its own energy security for granted. It should instead prioritise greater supply as its primary energy policy goal and scrutinise any future policy changes through that lens. Long-term economic resilience can only come from new domestic gas and oil production.
Second, the Domestic Gas Review must be resolved through a plan that balances domestic supply with attracting new investment. Government assumptions may have been that Asian demand for Australian LNG would fall in the 2030s in the face of growing Qatari and US supply. These need to be reconsidered.
Third, talk of new taxes must end. Higher taxes will directly hit Asian gas investors and discourage new investment that is needed. The gas industry paid $21.9 billion in taxes and royalties in the past year and will pay more taxes as it is allowed to grow and succeed. Australia needs to learn from the UK where a windfall tax has contributed to a steep decline in production.
Fourth, the government needs to take an Asia-wide view on emissions reduction. Independent research shows Australian LNG can contribute to large emission reductions in Asia, if emerging economies have access to affordable gas. But right now, Asian countries are switching back to coal due to gas shortages. The government must ensure the looming Safeguard Mechanism Review considers economical abatement opportunities, including access to international credits and greater support for carbon capture and storage in Australia.
Fifth, the Government must continue to support Japan’s strategy on LNG. Activists have demonised Japan’s approach to contract extra LNG volumes to manage worst-case scenarios. In a typical year, Japan does not require these volumes in full and resells a small portion of them to other Asian buyers. Japan’s motivation is not to profit from reselling – indeed it often resells at a similar or lower price. Rather its motivation is energy security – and Japan’s buffer strategy is now looking exceptionally prudent and prescient. The Australian Government has rightly rejected the activist criticisms of Japan and should continue to do so.
The Iran War has given the Australian public a new appreciation of the criticality of fossil fuels to Australia’s economic and national security. It has also highlighted the importance of relationships with key Asian allies.
Recent top-level energy-focused meetings and reconfirmed commitments to collaboration between Australia and Japan, Singapore, Malaysia and Korea are cases in point and positive developments.
The Australian Government should leverage current circumstances to reboot its gas policies and guarantee the long-term resilience of the nation.
Paul Everingham was CEO of the Asia Natural Gas and Energy Association (ANGEA) from September 2022 to June 2026. ANGEA works with governments, industries and communities in Asia, providing affordable solutions that promote energy security, economic growth and decarbonisation.
This article was originally published by The Australian on April 9, 2026.
