Amid War, US Oil Giant Agrees to Supply 100% of Its Oil to Indonesia

Jakarta, CNBC Indonesia - The Special Task Force for the Implementation of Upstream Oil and Gas Business Activities (SKK Migas) has confirmed that all crude oil production from the US-based company ExxonMobil in Indonesia will be fully supplied to meet domestic needs. This measure aims to strengthen national energy resilience amid global war disruptions. SKK Migas Head Djoko Siswanto stated that they have encouraged the Oil and Gas Cooperation Contract Contractor (KKKS) not to export its oil production any longer. He explained that this has increased the absorption of crude oil by domestic refineries compared to previous years. “Alhamdulillah, ExxonMobil’s KKKS portion is now 100% processed domestically,” Djoko said when met at the Ministry of Energy and Mineral Resources office in Jakarta, quoted on Wednesday (8/4/2026). This increase in domestic supply absorption is the government’s response to the escalating geopolitical situation. Thanks to this policy, nearly all national crude oil production or lifting now flows to refineries within the country. “It’s improving, improving. 98.2% if I’m not mistaken,” he added. Besides ExxonMobil, SKK Migas is also working to curb exports from other producers like MedcoEnergi. Although there is no official export ban this year, the government is opting for negotiations using special clauses to delay shipments abroad if domestic oil supplies are urgently needed. “Medco is just waiting for the letter from the minister. I’ve actually sent a letter stating that in Medco’s export contract with the foreign buyer, if the government needs it, the shipment can be postponed to the following year,” he explained. Regarding the selling price of crude oil to the domestic market, Djoko mentioned that Pertamina, as the buyer, will conduct direct negotiations to keep it economical. Purchasing oil domestically is considered far more beneficial for Pertamina than sourcing from the global market, where prices are skyrocketing. “Negotiation. Medco wants no gain no loss, meaning if the contract price is, for example, ICP plus 1-2 dollars, then Pertamina also pays 1-2 dollars. Compared to buying on the market, which is now more expensive. What’s the market price now? 100? If the contract is ICP plus just 2 dollars, which is more profitable?” he emphasised.