Energy Minister Angus Taylor has finalised a petroleum reserve deal with the United States.
Mr Taylor signed the agreement in Canberra on Wednesday morning with the US ambassador by his side, while his American counterpart Dan Brouillette beamed in from Washington.
The deal allows Australia to lease space in the US strategic petroleum reserve to store oil that can be drawn from during an emergency or domestic supply shortage.
US ambassador Arthur Culvahouse praised the relationship between the two nations, saying they would continue to stand together.
“A lot has changed in the last few days and we’ve learnt the importance yet again of energy security,” he said.
“Even more, I think we’ve learned the importance of true friends and trusted allies and Australia could not be a better mate.”
Mr Taylor has been negotiating the deal for some time following the early findings of a fuel security review.
“I’m very confident this landmark deal will benefit both of our nations coming out of the pandemic,” he said.
“I made a commitment to the Australian people that the government was and will be taking action to shore up our fuel security and enhance our ability to withstand global shocks.
“This lease agreement is an integral element of that commitment.”
Mr Taylor also flagged an announcement about a local fuel reserve.
Discussions are ongoing between the government and private sector about building more storage capacity.
The timing of the reserve deal allows Australia to take advantage of low oil prices.
CommSec says the price of oil is tied to when nations come out of lockdown.
“While the good news for motorists is that petrol prices are low. The bad news is that prices are lifting as drivers get back behind the wheel following the virus lockdown.”