Japan hints at fuel-swap deal with Australia’s LNG amid Middle east energy crisis, cautions against gas tax

Japan could be open to a fuel-swap deal involving Australian LNG but has cautioned Prime Minister Anthony Albanese against taxing oil and gas exports, saying it could hurt the bilateral relationship. The Japanese ambassador to Australia Kazuhiro Suzuki warned any imposition of a windfall tax on LNG exports in May’s Budget would be regarded by Tokyo as a “bad surprise” that would deter investment in the sector. “In [the] Japanese business dictionary, there’s no word called ‘good surprise’,” Mr Suzuki told a Minerals Council of Australia conference in Canberra. “Surprise, in the Japanese business dictionary, it’s always bad. If there’s a retrospective taxing or something, I think that is really bad news.” The Albanese Government is considering new so-called windfall taxes on the oil and gas industry to capture profits out of the Middle East crisis, which would hit countries such as Japan. However, Labor insists no final decision has been made. It comes as South Korea, Australia’s top supplier of diesel and second-largest source of petrol, has implemented emergency measures. Under the “whole-of-government” response, public institutions were instructed to cut back on passenger vehicle use, while the private sector was warned that restrictions could be introduced if it gets worse. Foreign Minister Penny Wong on Wednesday accused Iran of “weaponising” the Strait of Hormuz after the “unprecedented shock to energy” and urged all parties to allow the safe passage of supply through the region. “Iran’s weaponisation of the Strait of Hormuz, impacting oil and fuel prices worldwide, demonstrates the Iranian regime’s willingness to inflict economic pain on households and businesses across the world. Australia wants to see critical energy supplies flow to our partners and our region,” Ms Wong said. Australia has received a letter penned by Iran to 176 nations in a global shipping group to say “non-hostile” vessels can pass the Strait of Hormuz if they co-ordinate with Tehran. In the letter, sent to the International Maritime Organisation, Iran’s foreign ministry said Tehran had to take “necessary” measures to stop “aggressors and their supporters” from exploiting the critical waterway. Shipments of about one-fifth of the world’s oil and LNG have been impacted due to the de facto closure of the strait since US and Israeli military launched a war against Iran on February 28. “Non-hostile vessels, including those belonging to or associated with other States, may — provided that they neither participate in nor support acts of aggression against Iran and fully comply with the declared safety and security regulations — benefit from safe passage through the Strait of Hormuz in co-ordination with the competent Iranian authorities,” the letter, obtained by The Nightly, stated Senator Wong on Wednesday revealed she had also spoken with her Israeli counterpart Gideon Sa’ar and welcomed US talks with Iran on de-escalation and raising concern over the situation in Lebanon. She said she discussed Hizballah’s continued aggression towards Israel, agreeing the terrorist organisation must be disarmed, but reiterated that Australia supports Lebanon’s sovereignty. “Australia supports Lebanon’s sovereignty – so we do not want to see occupation of southern Lebanon by Israel,” she said.