Singapore’s reclaimed oil refining region, the 32-square-kilometre Jurong Island, has become the primary driver of record-high petrol prices in Australia as Middle East supply shocks ripple through the Asia-Pacific energy corridor, ABC Australia reports.

With the Strait of Hormuz effectively closed, Singapore’s three major refineries, which process 1.5mn barrels of crude daily, have been forced to slash output due to a lack of Middle Eastern feedstock. Because Singapore supplies roughly 20% of Australia's refined petrol, diesel, and jet fuel, these throughput impairments on a small artificial island near Singapore’s CBD are now directly responsible for the AUD2.38 ($1.64) per litre prices seen at Australian bowsers this week.

The crisis highlights Australia’s extreme refinery-lite vulnerability, where a 2,000-kilometre reliance on the area has turned a regional war into a domestic cost-of-living emergency. While Singapore serves as the region’s aggregation node, it lacks domestic crude reserves, allowing its role as a price-setter to be weaponised by geography.

For the Albanese government, the domino effect of Jurong Island’s reduced utilisation is a strategic wake-up call when Singapore's benchmark prices rise due to cargo thinning. Australian motorists aren't just paying for fuel, they are paying for the fragility of a just-in-time global supply chain.

Singapore Energy Minister Tan See Leng and PM Anthony Albanese have committed to a trade-flow pact, vowing to keep energy routes open even as competitors like South Korea and China restrict exports. Singapore is also aggressively sourcing alternative crude from Russia, Brazil, the US, and Venezuela to replace lost Gulf shipments. In addition, Singapore is leaning on Australian liquefied natural gas (LNG) to power its domestic grid, freeing up other energy resources for refining.