Australian foreign minister says China has agreed to cooperate on jet fuel exports

By Lewis Jackson

BEIJING, April 29 (Reuters) - The Chinese government has agreed to cooperate with Australian businesses on jet fuel shipments, Australia's Foreign Minister Penny Wong said on Wednesday, suggesting China could loosen curbs on exports imposed amid supply disruption from the Iran war.

Wong is in China as part of a three-nation tour that also includes Japan and South Korea, with Canberra seeking to keep ties with Beijing on a steadier footing while coordinating with regional powers on energy security.

"We believe this is an important step, but it is the first step," Wong told reporters in Beijing, adding that the aim of her trip was to press for Chinese cooperation "in particular for the provision of liquid fuels".

Australia, which imports most of its fuel, has experienced localised shortages since the Middle East conflict that began at the end of February.

Beijing has clamped down on fuel exports since March to protect domestic supply after the closure of the Strait of Hormuz disrupted crude and fuel flows. China is a major source of fuel in Asia and supplied a third of Australia's jet fuel last year.

'SHARED ENERGY SECURITY'

In a meeting with her Chinese counterpart, Wong said she "made the point that the imports China supplies to Australia, including jet fuel, support the Australian resources sector, which in turn helps to maintain the flow of commodities" that were crucial to the bilateral trading ties.

"Our energy security is shared," Wong said. "Energy supplies to us impact upon our capacity to provide other energy and other commodities to the region," she added.

China is Australia's largest trading partner, with Australian resources and energy exports dominating trade flow, making it one of the relatively few countries with which China runs a trade deficit. Large volumes of iron ore, as well as natural gas, coal and crude minerals, flow from Australia to China.

The official Chinese summary of Wong's meeting with Chinese counterpart Wang Yi did not mention any remarks Beijing's minister made about energy security or fuel.

Beijing was willing to work with Australia to "enhance communication and coordination, deepen mutually beneficial cooperation ... and bring greater certainty to the region and the world," Wang told the Australian minister, according to a readout released by China's foreign ministry.

China has approved 500,000 metric tons of fuel exports for May to some Asia-Pacific nations including Australia and New Zealand, representing a near doubling of shipments forecast for April, trading sources said, but levels remain less than half of last year's corresponding averages.