SINGAPORE: Singapore agreed to the continued flow of refined fuel to New Zealand in exchange for food security today as the trade partners firmed up supply chains choked by the Mideast war.
New Zealand imports about a third of its refined fuel from Singapore, including diesel, which is vital for its farming industry.
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Singapore, in turn, relies on New Zealand for about 14 per cent of its total food imports.
Under the Agreement on Trade in Essential Supplies signed in the city-state during a visit by Prime Minister Christopher Luxon today, both countries committed “not to impose unnecessary export restrictions on agreed essential supplies”, even during supply chain disruptions.
Singapore’s Prime Minister Lawrence Wong said the deal is key “because in difficult times, every country will be tempted to look inward”.
Luxon agreed, lauding Singapore’s diesel as a commodity that “underpins the farming and freight systems that keep New Zealand’s food moving into the region”.
Despite having no domestic reserves, Singapore is a major global oil refining and trading hub and exports massive amounts of fuel.
The two countries signed the agreement as supplies passing through the Strait of Hormuz are likely to remain limited even if the key waterway is reopened.
It will likely take months to clear mines, restore damaged energy port infrastructure and return confidence in the waterway, through which about a fifth of global crude oil and liquefied natural gas (LNG) transits during peacetime, Wong said.
Shipping through the Strait of Hormuz has been disrupted since the US and Israel began a bombing campaign against Iran on February 28.
Last month, Singapore and Australia signed a non-binding agreement requiring them to make “maximum efforts to meet each other’s energy security needs”.
Australia relies on imports for an estimated 90 per cent of its refined fuel products, of which around a quarter comes from Singapore.
Singapore buys around 32 per cent of its liquefied natural gas requirements from Australia.
