Bahlil's Purchase of US Oil to Boost Stocks Not as Simple as It Seems, Says UGM Economist
Jakarta — UGM economist Fahmy Radhi has questioned the Indonesian government’s plan to refill domestic crude oil stocks by redirecting imports to the United States following disruptions to Middle Eastern oil trade caused by conflict.
Fahmy highlighted concerns about the government’s approach of substituting imports from the Strait of Hormuz with supplies from Saudi Arabia or the United States. “It’s not as simple as switching to Saudi Arabian oil or, as Bahlil suggests, American oil,” Fahmy told Kompas.com by telephone on Monday, 9 March 2026. “It’s not that straightforward.”
The economist explained that purchasing oil from the United States could significantly increase logistical costs due to longer shipping distances compared to supplies from the Middle East. Beyond shipping concerns, Fahmy questioned whether crude oil from the United States would be compatible with Indonesian refinery specifications.
Fahmy identified additional complications related to the fuel types most consumed by the public. Pertalite, which is currently not produced on the international market, requires blending processes. “Would the Americans be willing to undertake blending, for example? Those are the kinds of supply-side issues that may emerge,” Fahmy said.
He assessed that the current global energy supply situation was abnormal due to the influence of geopolitical conflict, making the process of replenishing fuel reserves impossible to carry out quickly. “I don’t think conditions are normal given the state of war,” he stated.
According to Fahmy, official reserve estimates are calculated based on assumptions of normal consumption levels. Current consumption patterns are considered different due to panic buying observed in several regions. Fuel consumption is also expected to increase ahead of the Lebaran holiday period.
“Given the abnormal conditions affecting both demand and supply, I believe that 21 days will not be sufficient,” Fahmy concluded.