FILE PHOTO: Prime Minister Anthony Albanese announced a joint A$4 million feasibility study with the Western Australia government for a proposed refinery by Perdaman in Western Australia.
| Photo Credit:
TRACEY NEARMY
Australia will consider
building its first new oil refinery in more than 60 years, Prime
Minister Anthony Albanese said on Tuesday, as war in the Middle
East squeezes supplies from overseas and underscores the urgency
to improve energy security.
Albanese said the project will help build Australia’s
resilience and sovereign capability on fuel, potentially helping
shield the country from future supply shocks.
If the project proves feasible, the new large-scale oil
refinery will be built by industrial chemical producer Perdaman
in Western Australia, Albanese said.
“The war in the Middle East … is having an impact here,
like it’s having an impact right around the world,” Albanese
told reporters from Karratha in Western Australia’s Pilbara
region.
“One of the things that building national resilience does is
it makes Australia less vulnerable to the impact of events
around the world.”
Albanese said his government and the Western Australia state
government will jointly spend A$4 million ($2.8 million) on a
feasibility study for the refinery.
“We want to make sure that we get the right location but we
want to make sure as well that it’s a project that stacks up,
that can go forward,” Albanese added.
Australia depends on imports for about 80% of its fuel needs
and has been racing to secure supplies amid the Iran war.
The government’s push to cut its import dependence on oil
comes after an Australian Treasury report warned that the global
oil market has become more vulnerable “with weaker buffers
against supply shocks”.
Global oil inventory levels have dropped since conflict in
the Middle East intensified, while refined fuel markets are now
at risk of tightening further, the treasury said in a briefing
provided to Treasurer Jim Chalmers over the weekend.
Most of Australia’s domestic oil refineries were built
during the 1950s and 1960s, but high operating costs and the
emergence of large refineries across Asia forced many to shut
down over the past three decades.
Ampol’s Queensland refinery and the Viva Energy
facility in Victoria – both on the country’s east – are
the only two operational now, compared to eight in 2000.
Western Australia’s only refinery was shut down in 2021
after BP decided to convert its 146,000 barrels per day
Kwinana plant into a fuel import terminal.
Published on July 28, 2026
