Australia bowing to China? Agreeing to price lithium mines in RMB in exchange for Chinese exports of refined oil!
Recently, market rumors emerged that Canberra has been seeking an agreement with China to secure export quotas for refined oil. As a condition, Australia is willing to use the Renminbi (RMB) for pricing and settlement in trade involving key commodities such as lithium and iron ore.
According to Huitong Finance News, Australia imports about 80% to 90% of its refined oil, with aviation fuel from China accounting for as much as 32%. The country currently operates only two refineries, whose capacity meets just around 20% of national demand. This structural dependency leaves Australia highly vulnerable during global energy supply disruptions.
The Australian Broadcasting Corporation noted that the nation’s refined oil reserves can sustain only about 30 days—far below the International Energy Agency’s recommended 90-day standard. According to *The Australian Financial Review*, several oil tankers originally scheduled to load aviation fuel at Chinese ports en route to Australia were denied entry or unable to load due to incomplete customs clearance procedures around March 20. This directly led to an acute shortage of aviation fuel, leaving reserves sufficient for only 29 to 32 days.
Over the past decade, Australia has shut down four refineries. Its exported crude oil is mostly ultra-light crude, unsuitable for existing refining infrastructure. Meanwhile, increasing instability in international energy markets has intensified supply shortages, as Asian countries prioritize domestic needs and have reduced exports to Australia.
Diesel supply tensions have already begun affecting mining operations in Australia, with some lithium mining companies potentially forced to cut production. The aviation sector is hit first, facing increased risks of flight delays and rising ticket prices, which in turn will impact tourism and logistics industries. If Australia indeed uses RMB-denominated resources to trade for refined oil, the implications would be far-reaching.
Dao Ge believes this move could not only promote the use of the RMB in commodity trade but also reshape Sino-Australian trade relations. At present, this rumor remains unconfirmed by official sources from either China or Australia. However, regardless of the final outcome, the incident itself reflects profound shifts in the global energy landscape and new strategic competition among nations over energy security and trade settlement mechanisms.
Original source: toutiao.com/article/1860963136158848/
Disclaimer: The views expressed in this article are solely those of the author.