Why China’s jet fuel deal with Australia underscores Canberra’s balancing act

China has agreed to cooperate with Australian businesses on jet fuel shipments, while reaffirming that both countries uphold multilateralism in a meeting between the countries’ top diplomats on Wednesday.

Following talks with her Chinese counterpart Wang Yi, Australian Foreign Minister Penny Wong said Beijing was “facilitating engagement with Australian businesses on jet fuel” and called the move an important “first step” in alleviating supply crunches.

“Inputs China supplies to Australia, including jet fuel, support the Australian resources sector, which in turn helps to maintain the flow of commodities that are so important in the bilateral trading relationship,” Wong said, according to an Australian foreign ministry transcript.

Canberra is scrambling to shore up its fuel resilience after Beijing curtailed fuel exports to safeguard its own domestic stock.

With the US-Israel war on Iran entering its third month, the effective closure of the Strait of Hormuz has sent shock waves through global markets.