Australia refinery fire worsens fuel supply crunch amid ongoing global energy crisis

Australia oil refinery fire has caused fuel supply shortage amid ongoing oil crisis globally.

It happened as the fire at the largest of Australia's two oil refineries has hit petrol production, company and government ‌officials said on Thursday, just as the nation faces pressure to shore up fuel security with the Iran war disrupting global supply.

State fire authorities said the blaze, which broke out at a 120,000 barrels-per day refinery run by Viva Energy on Wednesday night, had been brought "under control" at noon on Thursday.

The fire came at a bad time for Australia as it depends on imports for 80% of its fuel needs and has been racing to replace supply disrupted by the Middle East conflict, which has driven up energy prices worldwide.

"This is not a positive development, but obviously there's a long way to go in terms of working out just what the impact is," Energy Minister Chris Bowen told Channel Nine.

Viva Energy's refinery supplies over half of the fuel in Australia's second most populous state, Victoria, and a tenth of the country's total demand.

The company said it expects output of petrol and aviation gasoline will be affected, but it will meet fuel demand through imports.

The plant is still producing jet fuel and diesel but at reduced levels for safety reasons, Bowen said.

“I would expect we'd see a price hike depending on the scale of the damage, and secondly, it reinforces the challenges we have in terms of sovereign and resilient capabilities here,” Australian Strategic Policy Institute analyst John Coyne said.

The incident comes as Prime Minister Anthony Albanese visits Kuala Lumpur on Thursday to discuss securing fuel supplies with his Malaysian counterpart, Anwar Ibrahim, following similar trips to Singapore and Brunei.

Malaysia and Brunei, which produce crude oil and refined products, could increase production but only to a certain degree, Coyne said.

No injuries have been reported from the fire at the refinery located about an hour's drive from Melbourne.

Notably, the extent of the damage was not immediately clear while the authorities suggest the cause of the fire at fuel refinery was accidental as the gas leakage ignited Viva fuel plant, which produces about 10 percent of Australia’s fuel, in Geelong, Victoria.

Additipnally, the Victoria State fire authorities said the blaze, which broke out at a 120,000 barrels-per-day refinery in Geelong run by Viva Energy on Wednesday night, had been brought “under control” at Thursday noon.