Australia's borders to stay closed until mid-2022

Australia's federal government expects the country's borders to remain largely closed until mid-2022, which will continue to weigh on jet fuel demand, followed by a gradual recovery in international tourism and an easing of the skills shortage from the slow reintroduction of temporary and permanent migrants.

Australia's international jet fuel consumption fell by about 75pc from a year earlier to 26,000 b/d in the July 2020-January 2021 period, the first seven months of the 2020-21 fiscal year. Total jet fuel demand, including for domestic flights, was down by 69pc to 51,000 b/d in the same comparison.

The delay from an October border reopening is largely because of a slower than expected vaccine roll-out, which has been complicated by national health advice that the AstraZeneca vaccine not be administered to those under 50 years old.

The impact on jet fuel consumption in Australia will create more pressure on the country's beleaguered refining sector and disrupt national carrier Qantas' plans to re-enter the international travel market . It will also keep the cost of key mining commodities, such as coal and iron ore, elevated as skills shortages push up wages.

International arrivals into Australia will continue to be constrained by state and territory quarantine caps over 2021 and the first half of 2022, the federal treasury said in the 2021-22 budget papers released today. International students may start arriving in late 2021, increasing gradually in 2022. But skilled migrants are not expected to start arriving until the second half of next year.

Tourists are unlikely to restart arriving from all parts of the world before mid-2022, although the government will look to develop more travel bubbles like the current one between Australia and New Zealand. Singapore could be an early candidate to be declared a safe zone by Canberra, allowing easier travel possibly ahead of June next year.

By Jo Clarke

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