Oil
East African oil projects offer fuel supply diversification for Australia
New refinery projects in East Africa could provide Australia with alternative fuel supply routes across the Indian Ocean.
Key points
- Dangote Group broke ground on a 700,000-barrel-per-day refinery at Lamu Port in Kenya on 30 September 2026.
- Australia relies heavily on refined oil imports from Asia, leaving it vulnerable to supply chain disruptions.
- The 1,447-kilometre East Africa Crude Oil Pipeline is near completion to transport Ugandan crude to international markets.
What happened
Aliko Dangote is developing a 700,000-barrels-per-day oil refinery at Lamu Port in Kenya, following a groundbreaking ceremony held on 30 September 2026. The facility will cost upwards of US$16 billion and aim for completion around 2030, with the Dangote Group holding a 70 per cent stake. The refinery is designed to process crude from Kenya's Lokichar Basin alongside supplies from regional producers such as Uganda, South Sudan, and Angola. Meanwhile, the East Africa Crude Oil Pipeline, which will transport crude from Uganda's Hoima district to Tanzania's Tanga Port, has reached 93 per cent completion.
Why it matters
According to the Lowy Institute, Australia imports about 90 per cent of its oil requirements, primarily sourcing refined products from Asian nations like Singapore, South Korea, and Malaysia. Middle Eastern conflicts and vulnerabilities in key maritime chokepoints have exposed risks in these supply chains. East Africa's emerging energy corridor across the Indian Ocean presents a geographically closer alternative for Western Australia. Beyond energy security, engaging with East African infrastructure offers economic diplomacy opportunities for Australia as it looks westward across the Indian Ocean.
What comes next
While the East African projects progress towards completion around 2030, any future supply arrangement for Australia depends heavily on domestic import-terminal capacity, local distribution infrastructure, and the commercial viability of supplying domestic refineries. Policymakers must also balance these liquid fuel considerations against ongoing clean-energy transitions and emissions targets.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
26.9% of Australia’s merchandise exports were fuels in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
