Australia and Perdaman Group to Study First New Domestic Refinery Since 1960s After Iran War
The feasibility study, paired with a planned 2.3 million tonne fertilizer facility, forms part of Canberra's AUD 7.5 billion supply security response to the Iran conflict.
Australia's federal and state governments and industrial company Perdaman Group said on Monday (2026-07-28) they would jointly study the feasibility of a new domestic oil refinery, the first such project to be considered since the 1960s. The Iran war had exposed how heavily the country relies on imported refined fuel, and the government framed the study as a direct response to that vulnerability.4
Perdaman sits at the center of Australia's fertilizer security push as well. The company says its planned facility could produce up to 2.3 million tonnes of fertilizer per year, which it describes as a significant proportion of Australia's annual domestic usage. At that scale, the project would reduce the country's dependence on offshore suppliers whose supply chains have been disrupted by the Iran conflict and related market shocks.4
Canberra had already committed substantial capital to bridging the gap. The Albanese government established an AUD 7.5 billion ($5.34 billion) Fuel and Fertilizer Security Facility covering diesel, aviation fuel, petrol and fertilizers. Of that, AUD 3.2 billion is funding a government-owned Australian Fuel Security Reserve targeting roughly one billion liters of long-term diesel and jet fuel storage. An additional AUD 34.7 million over four years was allocated for supplementary supply security measures.1
Aviation fuel proved the most acute near-term pressure. Australia secured three cargoes from China totaling more than 600,000 barrels, expected to arrive from early June (2026-06), on top of 600,000 barrels, roughly 100 million liters, already secured through the Facility, the government said. Negotiations with further regional suppliers were continuing.1
Fertilizer markets have deteriorated alongside fuel supply. An Atlantic Council analysis estimated the Iran crisis alone could push urea costs up by as much as $1.3 billion. Ukrainian strikes on Russian fertilizer infrastructure have removed a further supply source: the same analysis estimated an 80 percent cut in Russian ammonia exports as a result of those strikes.2
Those dual disruptions, covering both Middle East supply routes and Russian ammonia capacity, have left regional agricultural importers with limited alternatives. Australia's grain and commodity export sectors depend on fertilizer inputs that domestic production has not historically provided, leaving farmers exposed to the full force of a multi-source supply shock.2
The conflict also hit Australia's LNG exports. A tropical cyclone disrupted production at the Chevron and Woodside facilities in Western Australia, the country's two largest LNG plants, worsening a global supply crunch already strained by the Middle East conflict. The episode underlined how Australia's energy position sits on both sides of the same disruption: a major commodity exporter operating with thin domestic supply buffers.3
The refinery feasibility study announced on Monday (2026-07-28) is early-stage, and the gap between a study and a construction decision is wide. Refinery projects in countries without recent domestic refining precedent take years to assess. The economics that pushed Australia out of domestic refining were driven by cheap imported product; the Iran war has disrupted those economics but has not obviously reversed them. Any final investment decision will turn on whether a sustained shift in global supply conditions makes domestic refining competitive over the long run.4
Perdaman's 2.3 million tonne fertilizer capacity figure is a company projection, and carries the uncertainty appropriate to that status. Wallumbilla gas spot settled at A$11.70 per gigajoule at Friday's (2026-07-31) close — the feedstock price against which any domestic gas-based fertilizer operation must prove viable if Perdaman's plans eventually reach construction.4,1