Australia secures 38,500 tons of urea from Brunei amid tightening global supply chains

Australia secured 38,500 metric tonnes of agricultural-grade urea from Brunei and three jet fuel cargoes totaling more than 600,000 barrels from China, the Albanese government announced on May 19, as the closure of the Strait of Hormuz continues to disrupt energy and fertilizer supply chains globally.

Prime Minister Anthony Albanese announced both deals simultaneously following diplomatic discussions with Brunei and talks between Albanese and Chinese Premier Li Qiang. The jet fuel shipments — described as a “first step” with more potentially to follow — are expected to arrive from early June. Brunei normally supplies approximately 11% of Australia’s fertilizer-grade urea imports.

Australia normally sources around 60% of its agricultural urea through Persian Gulf shipping lanes that pass through the Strait of Hormuz, a corridor severely disrupted since February 2026 following the escalation of conflict in Iran. The government also deployed a A$7.5 billion fund for transport and agricultural security as part of its broader supply response.

The Brunei urea deal follows a separate arrangement in April through Incitec Pivot’s trading relationship with PT Pupuk Indonesia, which locked in 250,000 tonnes for May–December delivery. Together, the two agreements cover a significant share of Australia’s anticipated shortfall during the main cropping season, when urea demand from grain and canola growers peaks from May through August.

With Persian Gulf supply still severely constrained, further procurement from Southeast Asian and East Asian suppliers is widely expected through Q3 2026.

Source: Reuters