A ferocious blaze that tore through Viva Energy's Corio refinery in the early hours of Thursday morning is more than a fuel supply story. For Australia's insurance industry, it is a stress test of property, business interruption, marine, cargo and liability exposures arriving at the worst possible moment — and a pointed reminder of what happens when a nation allows its critical infrastructure to concentrate into just two points of failure.
The fire, which broke out around 11pm Wednesday following a gas leak and multiple explosions in the facility's "Mogas" petrol production complex, was still burning out of control as crews battled into Thursday morning. More than 50 firefighters and ten trucks responded to the Corio site, deploying remotely operated monitors to fight the blaze from a safe distance given the volatility of flammable hydrocarbons and gases involved. All workers have been accounted for and no injuries reported — a significant piece of good fortune given the facility had between 30 and 40 staff on site at the time.
The fire's immediate footprint — contained to an area roughly 30 metres by 30 metres — belies the scale of its potential insurance consequences.
Viva Energy's Corio refinery is a 70-year-old facility processing up to 120,000 barrels of oil daily. It produces petrol, diesel, LPG, jet fuel, avgas, hydrocarbon solvents, marine fuel oil and low aromatic fuel, as well as bitumen and plastics used in food packaging, medical equipment and banknotes. The two units directly affected sit within the petrol production complex, with refinery general manager Bill Patterson confirming the impacted unit converts LPG gases into a gasoline component used in blending regular unleaded petrol.
On the property side, insurers will be assessing damage to what is genuinely irreplaceable domestic infrastructure. Replacement cost for specialised refinery processing units runs into the hundreds of millions of dollars, and lead times for critical components can stretch to years.
The business interruption exposure is potentially larger still. The refinery had been running at elevated capacity for six weeks — deliberately deferring non-essential maintenance to maximise output in response to global supply pressures linked to the conflict in the Middle East. Viva Energy CEO Scott Wyatt confirmed maintenance had been delayed, though he stated those deferrals did not affect units directly involved in the fire. That distinction will be scrutinised closely by insurers and investigators alike.
A plant worker on site told media the damage "could take weeks to repair." Analysts cited in related reporting have suggested operational disruptions could extend to three months. Any extended outage triggers not just Viva Energy's own BI cover, but contingent business interruption exposures across the downstream supply chain — transport operators, fuel distributors, aviation operators, and industrial users whose operations depend on a reliable petrol and diesel supply from this facility.
Although it’s not clear yet which brokers or insurers are involved - risk of this size and complexity - a 120,000 barrel-per-day refinery classified as critical national infrastructure - would almost certainly be placed through one of the major global energy brokers, most likely Marsh, Aon, or WTW. The property and BI tower for a facility of this scale would typically involve a lead underwriter backed by a syndicated panel, with Lloyd's energy syndicates likely playing a significant role. Major energy insurers like AIG, AXA XL, Swiss Re Corporate Solutions, and Munich Re are all active in this space globally.
The timing compounds an already fragile national picture. Australia had been operating under a National Fuel Security Plan since late March 2026, agreed at National Cabinet in response to supply disruptions caused by the US-Iran conflict. That plan included a temporary 20 per cent reduction in the Minimum Stockholding Obligation for petrol and diesel, relaxed fuel quality standards to unlock additional import supply, and strengthened powers for Export Finance Australia to underwrite spot fuel purchases — the kind of emergency measures that signal just how tight the margin had become before Wednesday night.
In 2025, the Viva Geelong and Ampol Brisbane refineries together produced 12 billion litres of petrol, diesel and jet fuel — around 20 per cent of Australia's annual needs. The remaining 80 per cent arrives as imports. With the Corio facility's petrol production complex now offline and global spot markets already elevated due to Middle East tensions, the government faces sourcing emergency imports at premium pricing on top of an import program that Wyatt described as "quite full for the next couple of months."
Tanker traffic through the Strait of Hormuz had already dropped to approximately seven vessels per day in March, compared to typical daily movement of over 100 before the conflict. That supply squeeze, already baked into global pricing, is now the baseline from which Australia must source replacement volumes.
For liability underwriters and risk engineers, the operational decisions made in the weeks before the fire will attract close attention. Running a 70-year-old facility at sustained elevated capacity while deferring maintenance is a risk profile that warrants scrutiny regardless of whether a direct causal link is established.
Viva Energy's CEO stated that recent maintenance planning had been delayed to prioritise maximising diesel production due to supply pressures linked to the Middle East conflict, but said the incident was not related to that delayed maintenance work. Investigators will need to verify that position. WorkSafe Victoria is among the agencies attending the scene, and a full investigation into the ignition source and circumstances of the initial gas leak is underway.
The broader pattern is one the insurance industry has seen before: ageing assets pushed harder than their design envelope in response to external pressures, with maintenance cycles compressed to meet production demands. Whether or not deferred maintenance contributed to this specific incident, it is a risk factor that will feature in future renewal negotiations for similar facilities.
The insurance implications extend well beyond Viva Energy's own tower. Consider the cascade:
Marine and cargo: With domestic petrol production impaired, Australia must urgently source additional refined fuel imports. More tanker movements, at elevated spot rates, through disrupted shipping lanes, translates directly to increased marine cargo exposure. Hull and cargo underwriters will be monitoring vessel routing through alternative supply corridors.
Aviation: Jet fuel production at the Corio facility continues for now, but the broader supply picture for Australian aviation — already navigating a challenging year — adds another layer of operational risk for airlines and their insurers.
Environmental liability: Victoria's Environment Protection Authority is already assessing impacts on Corio Bay water quality following the blaze. Atmospheric monitoring is ongoing. The environmental liability tail from a major refinery fire involving hydrocarbons, firefighting foam and runoff into a coastal bay can extend for years.
Directors and officers: A publicly listed company operating critical national infrastructure at maximum capacity while deferring maintenance, in the middle of an officially declared national fuel security emergency, faces inevitable scrutiny from regulators, shareholders and potentially government inquiries. D&O underwriters will be watching the investigation findings closely.
The deeper issue for the insurance industry is one of concentration risk that goes beyond any single policy or tower.
As the Lowy Institute noted recently, Australia finds itself with a perverse sense of déjà vu — the current fuel security crisis was entirely predictable and, in fact, comprehensively predicted, with a 2014-15 Senate inquiry examining the very issues in which the country is now mired. Four refineries have closed in the past decade. Australia now has two. When one burns, the nation has one.
Domestic production capacity has been reduced by approximately 60 per cent over the past decade, increasing reliance on Asian and Middle Eastern suppliers. That structural shift has been well understood in energy policy circles for years. It is now acutely visible on the evening news.
For reinsurers and insurers with aggregated exposure to Australian energy infrastructure, the Corio fire crystallises a question that has been building quietly: what is the appropriate premium for insuring assets that are, effectively, irreplaceable within any commercially meaningful timeframe, in a country with no redundant domestic refining capacity, during a period of global supply shock?
The answer to that question will be worked out over the coming weeks in claims rooms and renewal negotiations. But the direction of travel is clear.
