Govt unveils gas reservation plan; ASX surges on peace hopes; Ted Turner dies
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Welcome to Fear and Greed, business news you can use. Today, the federal government will introduce an East Coast gas reservation system with the goal of pushing down energy prices. Global equity markets surge after US President Donald Trump says he's had fruitful discussions with Iran and the Australian property market heads for a downturn. Plus, the financial watchdog launches an investigation into Tabcorp over anti-money laundering. And Ted Turner, the founder of CNN Cable TV that changed the world, dies aged 87. It's Friday, the 8th of May, 2026. I'm Juliette Sully from Ausbiz. And good morning and happy Friday, Sean Alma.
Happy Friday to you, Juliette.
What is the new East Coast gas reservation system introduced by the federal government?
Have you enjoyed the week?
I have, but it's been very fun. And it's getting cold as we head into the weekend too, isn't it?
Sure is. Freezing.
All right, the main story this morning, the federal government will introduce an East Coast gas reservation system that requires producers to sell at least 20% of gas extracted in Australia to Australians. Energy Minister Chris Bowen said the decision will ensure downward pressure on prices, adding that Australia is the only gas exporting country in the world without some form of reservation. The system will result in what Bowen called a modest oversupply of gas, and that is intentional. Western Australia has had a gas reservation policy since 2006 and it requires producers to reserve 15% of output for domestic use.
Resources Minister Madeleine King called it a historic structural shift in the Australian gas market. She said the rules will not disturb existing contracts and will only apply to the spot market. Now, spot gas was about $4 a gigajoule in 2015 before exporting began. At its peak not so long ago, it was $12 a gigajoule. The operators of three giant LNG gas export terminals in Queensland, as well as offshore producers in the Northern Territory, are directly affected. Gas use in Australia is coming down. In fact, in the first quarter of this year, it was at its lowest level since 1999. Batteries and renewables are displacing gas, but it is considered the critical transition energy in coming decades, helping us shift from fossil fuels to renewables.
And Woodside, Origin Energy and Santos, as well as several well-known offshore players, including Shell, ConocoPhillips, Petronas and Total Energies, are part of consortiums extracting and exporting East Coast gas. And they are not happy. Some argue the reservation scheme will not only lower the price they receive for gas, but also undermine investment in the industry in Australia.
There's also plenty of contention over whether 20% in reserve will flood the market, depressing prices. Now, the major coal companies yesterday, New Hope, Yan Coal, for example, they lost ground on the share market because they're hit by this decision as well, because gas becomes relatively more attractive than coal. Of course, buyers along the East Coast, including big manufacturers, plenty of consumers, are pretty happy about the news. There is some good news for the producers, though. The federal government has ruled out a new gas tax on existing contracts in next week's federal budget. So that's probably cold comfort for them, but it's something.
Something indeed. All right. Well, global equity markets surged over the past 36 hours. after US President Donald Trump said that a deal with Iran is possible after, quote, very good talks. US news outlet Access reporting that the deal involves a one-page memorandum with a moratorium on Iranian nuclear enrichment, lifting of sanctions and both sides dropping their attempts to control the Strait of Homs. Later, President Trump claimed that Iran had agreed to his demand that it cannot have a nuclear weapon, while Iran said that safe, stable passage through the waterway will be possible with new protocols in place.
The news sent Wall Street to new record levels. The tech-heavy Nasdaq jumped more than 2%. Yesterday, the broad-based S&P 500 was up 1.5%. Even the Russell 2000, which includes many smaller stocks, has been a great underperformer.
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