Key Takeaways
- Prime Minister Anthony Albanese visited Brunei Darussalam to secure a reliable urea supply amid Middle East disruptions.
- Brunei supplied about 11 % of Australia’s urea imports (value and volume) in 2025 and also provides roughly nine per cent of the nation’s diesel.
- Urea is the world’s most used nitrogen fertiliser, essential for boosting yields of wheat, barley, oats and oilseeds by up to 40 %.
- Australia imports roughly 3.5 million tonnes of urea yearly; prices have risen from $750/t in 2021 to over $1,500/t recently.
- A $574 million federal‑WA funded urea plant in the Pilbara, operated by Perdaman, is slated to open in 2027 and could produce 2.3 million tonnes per year, covering about two‑thirds of national demand.
Purpose of Albanese’s Visit
Prime Minister Anthony Albanese travelled to Brunei Darussalam to discuss securing a reliable supply of urea, a vital nitrogen fertiliser, amid worsening disruptions to shipments from the Middle East. The meeting with Sultan Haji Hassanal Bolkiah at the Royal Palace in Bandar Seri Begawan focused on strengthening bilateral energy and food‑security cooperation. Leaders issued a joint statement reaffirming their commitment to maintain the flow of essential goods, including diesel, crude oil and agricultural inputs such as urea. The visit underscores Australia’s effort to diversify fertiliser sources and reduce reliance on a volatile supply chain.
Brunei’s Share of Australia’s Urea Imports
According to DFAT data for 2025, Australia sourced about 65 % of its fertiliser‑grade urea from the Middle East, with the UAE, Saudi Arabia and Qatar providing over 55 % of the total. Brunei Darussalam supplied 11 % of Australia’s urea imports in both value and volume last year, ranking it as the fourth‑largest source. Brunei also contributes roughly nine per cent of the nation’s diesel imports. Before the recent Middle East conflict, Australia obtained close to 20 % of its annual urea requirement from Brunei, highlighting its strategic value as a nearby alternative.
What Is Urea and Why It Matters for Australian Crops
Urea is the world’s most widely used nitrogen fertiliser, a synthetic compound that supplies essential nitrogen to plants. In Australian agriculture it is critical for boosting yields of wheat, barley, oats and oilseed crops such as canola. According to agriculture analyst Andrew Whitelaw, urea enables farmers to realise the full genetic potential of a crop; without it, yields can fall by up to 40 % and protein quality declines. While organic systems can produce crops without urea, they cannot match the productivity and grain quality achieved with synthetic nitrogen fertilisation.
Australia’s Current Urea Import Sources and Volumes
Australia imports roughly 3.5 million tonnes of urea each year, a figure cited by Andrew Whitelaw. In 2025, about 65 % of that volume came from the Middle East, with the UAE, Saudi Arabia and Qatar together accounting for more than 55 % of imports. Southeast Asian nations supplied the next largest share, and Brunei Darussalam contributed 11 % of both the value and volume of urea imports. The country also provides about nine per cent of Australia’s diesel imports. These figures illustrate Brunei’s role as a significant, though secondary, supplier of a critical agricultural input.
Disruption Caused by the Middle East Conflict
The ongoing conflict in the Middle East and the associated closure of the Strait of Hormuz have severely disrupted the flow of urea from traditional Gulf suppliers. Whitelaw notes that even if shipments resume, producers face a two‑week wait list for new urea, while existing stockpiles are being drawn down. In mid‑February 2025 the cost to import urea into Australia was about $700 per tonne; by March it had risen to over $1,550 per tonne, more than doubling the price. Australia lacks strategic urea reserves, leaving farmers exposed to sudden supply shortages and price spikes.
Brunei as an Alternative Supplier Amid Disruptions
With Middle East shipments curtailed, Australian importers have turned to Brunei Darussalam as the nearest reliable source of urea. Whitelaw estimates that in April 2025 only about 300,000 tonnes of urea entered the country, compared with 600,000 tonnes in the same month a year earlier. Of that April volume, only one vessel came from the Middle East while the remainder was sourced from Brunei and Indonesia. As other Asian nations such as India, Vietnam and Thailand also seek Asian urea, competition for the limited supply is intensifying, making Brunei’s role increasingly vital for Australian grain growers.
Domestic Urea Production Initiatives: The Perdaman Plant
To reduce reliance on foreign supplies, the federal and Western Australian governments have jointly committed $574 million to fund a domestic urea processing plant in the Pilbara region, operated by Perdaman Chemicals and Fertilisers. Slated to commence operations in 2027, the facility is projected to become Australia’s largest urea producer, capable of manufacturing approximately 2.3 million tonnes of fertiliser per year. Once online, the plant could cover about two‑thirds of national demand, providing a strategic buffer against import disruptions and helping to stabilise domestic prices for farmers.
Economic Impact on Farmers: Prices, Yields and Planting Decisions
Rising urea prices directly affect farm profitability. Whitelaw notes that Australian farmers, whose capacity to pay for inputs is higher than that of many developing‑nation counterparts, still feel the squeeze when costs climb from $750/t in 2021 to over $1,500/t recently. Without urea, yields could drop by up to 40 %, prompting some growers to consider planting less area or switching to lower‑input crops. While higher input costs have not yet translated into significant retail food price increases, the risk remains that prolonged fertiliser scarcity could curb production and eventually push up consumer prices.
Government Response and Regional Diplomacy Efforts
Prime Minister Albanese has framed the Brunei visit as part of a broader strategy to secure Australia’s energy and food supplies through stronger regional partnerships. In his statement he emphasized that engaging with critical partners such as Brunei and Malaysia helps ensure fuel supplies remain secure during periods of uncertainty. The joint statement with the Sultan reaffirmed cooperation on energy, food security and the flow of essential goods, including diesel, crude oil and urea. By deepening ties with Southeast Asian nations, Australia aims to diversify its import sources and reduce vulnerability to geopolitical shocks in the Middle East.
Outlook: Risks, Mitigation and Future Prospects
Looking ahead, Australia’s fertiliser security hinges on three pillars: accelerating the Pilbara urea plant, maintaining robust trade links with Brunei and other Asian suppliers, and possibly building strategic reserves. Whitelaw warns that if Middle East flows remain disrupted, competition for Asian urea will intensify, potentially driving prices higher and forcing farmers to cut planted area. However, the anticipated 2027 domestic plant could eventually supply two‑thirds of national demand, offering a buffer against future shocks. Continued diplomatic engagement and investment in domestic capacity are seen as essential to safeguarding Australia’s agricultural output.