Australia intends to reserve a portion of its liquefied natural gas (LNG) exports for the domestic market in order to lessen the risk of energy shortages, Energy Minister Chris Bowen announced on Thursday.
The measure will require the country’s largest gas producers to set aside 20 percent of their LNG output for Australian consumption. The policy, which Bowen said will be enacted through legislation by July 2027, aims to buffer the nation against “global price volatility” and ensure a reliable supply of fuel for home users.
Australia is one of the world’s biggest LNG exporters. The United States and Israel’s strikes on Iran in late February sent regional oil and gas prices soaring, intensifying demand for Australian LNG across Asia. According to the Asia Natural Gas and Energy Association, roughly 40 percent of Japan’s LNG imports originate from Australia, while more than 30 percent of Singapore’s LNG supply comes from Australian fields.
Bowen stressed that the new reservation scheme will not affect existing export contracts. “We have consulted closely with trading partners to ensure that it is well understood around the world that Australia will always be a reliable supplier of energy,” he told reporters. The government’s approach is intended to maintain the confidence of overseas buyers while protecting the domestic market.
The policy emerges against a backdrop of heightened energy security concerns. Iran’s shutdown of the Strait of Hormuz – a key conduit for global fuel shipments – has curtailed roughly one‑fifth of world oil flow, prompting Australia, an isolated nation with only two oil refineries, to reinforce its energy resilience. Prime Minister Anthony Albanese announced a separate initiative to establish a national fuel stockpile of one billion litres.
Major Australian gas companies, including Shell, Chevron and Woodside, generate substantial revenues from LNG sales abroad. While some critics have called for higher taxes on these exports, the government rejected such proposals last week. Instead, it is focusing on securing a share of the product for local use without disrupting the broader market.
World oil prices fell on Wednesday after U.S. President Donald Trump signaled a possible de‑escalation of the conflict with Iran, underscoring the sensitivity of global energy markets to geopolitical developments.
If implemented as planned, the 20 percent reservation will provide a modest but steady flow of LNG for Australian power generation and industry, complementing ongoing investments in renewable energy sources. The move illustrates Canberra’s strategy of balancing export-driven growth with domestic energy security in an increasingly volatile global landscape.
