The war in Iran has done more than just disrupt the flow of oil and liquefied natural gas (LNG) from the Middle East, affecting essential fuel supplies to many countries. It is also disrupted another essential product: fertilizer. About 30 percent of the world’s production of nitrogen-based urea fertilizer, as well as much of the ammonia and sulfur, normally passes through the Persian Gulf region. When fighting intensified in late February, shipping insurers raised their premiums, some ships were delayed or blocked, and Iranian and Qatari producers temporarily reduced production.
Australian agriculture is highly dependent on imported fertilizers. Depending on the year, up to 80 percent of its fertilizer needs come from foreign sources. This creates a food security vulnerability that the war has exposed.
Yet just as Australia has productively used its regional relationships to secure its fuel supply – now with larger fuel reserves that at the start of the war – it was the same for fertilizers. This week, a ship carrying 47,250 tonnes of urea fertilizer from Indonesia docked in Brisbaneas part of a 250,000 tonne agreement between the two countries.
Given that Australia is a significant agricultural exporter to Indonesia, it is in Jakarta’s interests for Australia’s agricultural industry to be productive. Indonesia being the second largest importer of wheat in the world, Australia was able to provide him with supplies that had been affected by the war in Ukraine.
Food security has become a major geopolitical concern since the disruptions caused by the COVID-19 pandemic, as well as the wars in Ukraine and Iran. Fertilizer markets have been among the hardest hit, with price increases driven by sanctions, energy shocks and transportation bottlenecks, combined with supply chain constraints. It is clear to governments how much food production depends on events that can unfold well beyond their borders.
While Australia is a major exporter of agricultural products, Indonesia has significant fertilizer reserves. production capacity through its public industrial enterprises. This means that there is a real economic complementarity between the two countries, the absence of which previously hampered trade relations.
Yet the fertilizer deal is more than just a commercial transaction. The two governments have framed the agreement as part of a broader agenda for food security and supply chain resilience in the Indo-Pacific region. Both countries seek to present themselves in the broader Indo-Pacific region as players capable of finding solutions to regional issues affecting vital interests like food security.
This short-term cooperation becomes more and more strategically important as both countries attempt to navigate a global environment defined by geopolitical competition, economic uncertainty and new military hotspots with significant repercussions. This creates a practical architecture that can extend to other products. It may be fertilizer today, but it could be any number of other essential products tomorrow. The value lies in production, of course, but it also lies in trust: knowing that both neighbors can quickly work to solve each other’s problems.
This type of practical initiative allows Australia and Indonesia to overcome the barriers of their cultural differences. There are arguably no two neighbors more culturally different than Australia and Indonesia. It takes a lot of work to build implicit trust. It is through practical and coherent problem solving that this trust can be built and extended to other areas of cooperation.
Prime Minister Anthony Albanese’s government has made concerted efforts to strengthen relations with Indonesia, producing the Global strategic partnership action plan for 2025-2029, which aims to strengthen cooperation in the areas of economic development, politics, security and maritime affairs, while expanding people-to-people and institutional exchanges at all levels of society.
Besides this, the Common Security Treaty – settled in February 2026 – is considered the most important milestone in the bilateral relationship in 30 years, linking the two countries to regular high-level consultations and a shared vision linking security and economic prosperity. This has also been used to develop trilateral formats with Japan and with Papua New Guinea.
These agreements create the institutional frameworks that allow other practical measures to be deployed. They also demonstrate the goodwill that now allows Albanese to pick up the phone and chair his Indonesian counterpart, Prabowo, whenever necessary and find mutually beneficial solutions. Tonnes of fertilizer are unloaded in Brisbane for Australian farmers. This is not a one-off agreement but rather the product of a constant fertilization of relations between Canberra and Jakarta.