Australian businesses are in talks with Chinese state-owned oil companies over jet fuel sales, marking a diplomatic breakthrough for the Albanese government.
Foreign Minister Penny Wong confirmed the development in Beijing on Wednesday night after meeting her Chinese counterpart Wang Yi, describing it as an early but significant result of sustained high-level engagement between the two governments.
'Following the Prime Minister's discussions with Premier Li, I can confirm that the Chinese Government is facilitating engagement with Australian businesses on jet fuel,' Wong said.
'I expressed my appreciation of this cooperation to Minister Wang Yi this evening.'
The engagement follows a phone call earlier this month between Prime Minister Anthony Albanese and Chinese Premier Li Qiang, held amid mounting alarm in Canberra over dwindling jet fuel and diesel supplies.
Airlines have warned existing fuel assurances may run out by the end of May as export bans and restrictions ripple across global markets.
China is Australia's largest supplier of jet fuel, making up about 30 per cent of the country's supply, and ordered refineries to halt oil exports in March.
It came as the Middle East conflict saw the closure of the Strait of Hormuz, through which around 20 per cent of global oil flows, and about 80 per cent of the oil destined for Australia and the broader region.
Penny Wong (left) meeting with her Chinese counterpart Foreign Minister Wang Yi (right)
'This is an unprecedented shock to global energy markets,' Wong said.
'It is more important than ever for countries of our region to work together, to coordinate our responses and to keep fuel and goods flowing.'
While Wong declined to name individual companies, state oil giant Sinopec is understood to be coordinating the talks, which involve direct business-to-business negotiations rather than government purchases.
The move is being interpreted in Canberra as a sign of approval from the highest levels of the Chinese system.
The breakthrough comes as Beijing reportedly approved 500,000 metric tonnes of fuel exports for May, almost double April's forecast shipments to destinations outside Hong Kong, although still well below pre-crisis averages.
Australian officials view the decision as a response to Wong's deliberate strategy of reframing Australia's fuel shortage as a shared economic risk.
She repeatedly stressed that Chinese fuel exports underpin Australia's ability to supply commodities critical to China's own economy.
'The inputs China supplies to Australia, including jet fuel, support the Australian resources sector, which in turn helps to maintain the flow of commodities that are so important in the bilateral trading relationship,' Wong said.
Wong (pictured) said that Chinese state oil giant Sinopec would send jet fuel to Australia
'There is a clear mutual benefit in keeping those supply chains running.'
She added that Australia's dependence on imported fuel was not unique.
'What this has shown us is how vulnerable so many economies are to the conflict in the Middle East and the closure of the Strait,' she said.
'China and Australia are both regional economies, and we both want to see the Strait open.'
The carefully managed visit was briefly overshadowed earlier on Wednesday when a Chinese official blocked an Australian government photographer during Wong's meeting with Vice President Han Zheng, prompting a terse intervention by an Australian diplomat.
Despite progress, Wong cautioned that the deal remains at an early stage.
'This is an important step,' she said.
'It is the first step, because what we want to see now is those engagements continue and commercial contracts flow.'