Australia's export credit agency to underwrite fuel imports by Viva, Ampol to boost supply

SYDNEY, April 9 (Reuters) - Australia will secure extra fuel supply by underwriting spot market purchases by its two largest suppliers, Ampol ALD.AX and Viva Energy VEA.AX, through its export credit agency, Prime Minister Anthony Albanese said on Thursday.

It comes after the parliament last week passed new laws to enable Export Finance Australia to underwrite fuel imports in response to shortages due to the Iran war.

Australia, which imports around 80% of its liquid fuel, has experienced ​localised shortages since the ​U.S.-Israeli war with Iran began in late February.

"Export Finance Australia have agreed to terms with our two largest suppliers … to enable them to bring more fuel to Australia," Albanese told a news conference.

"This is additional supply here in Australia that they will be able to source. And as part of this agreement, the government can direct where that supply goes."

Albanese will also travel to Singapore to meet Prime Minister Lawrence Wong on Friday as part of diplomatic efforts to shore up fuel supply.

Energy Minister Chris Bowen said volatile oil prices and "speculation about what will happen in the Middle East" had made purchases riskier for companies.

"This arrangement will enable the companies to make a purchase that would have been non-commercial and to go out and buy that fuel for Australians, that otherwise will go to other countries," he said.

News of a two-week ceasefire between the U.S. and Iran sent oil prices plummeting below $100 per barrel on Wednesday. But they climbed on Thursday amid concerns supply from the Middle East may ​not fully resume, with the Strait of Hormuz remaining largely blocked.

Bowen said the government would not dictate where Viva or Ampol could source the fuel from.

"Obviously the closer it is to Australia, the better, the quicker it is to get here - if it's from Singapore or Korea or Malaysia for that matter. But there's also opportunities in North America and Mexico in particular," Bowen said.