Indonesia Prepares Oil Storage Project to Strengthen Energy Security Amid Geopolitical Tensions

Jakarta — The Indonesian government will construct oil storage tanks in Sumatra to increase national energy reserve capacity to three months. This initiative is vital for strengthening energy resilience amid global geopolitical dynamics, including conflicts in the Middle East.

Energy and Mineral Resources Minister Bahlil Lahadalia stated that Indonesia’s current oil storage capacity is limited, with existing facilities able to support only 20 to 25 days of national requirements.

Lahadalia considers the development of storage facilities a priority so the government has sufficient space to hold large volumes of oil.

“We must build storage first. A minimum of three months. If we import large quantities, where will we put it? That is simply the reality, it is not anyone’s fault,” Lahadalia said at a press conference at the Energy and Mineral Resources Ministry on Monday, 9 March 2026.

According to him, the feasibility study for the project is currently underway with implementation targeted for this year. However, he did not provide specific details regarding the exact location of the storage tanks in Sumatra.

“The feasibility study is in progress, with a target to begin implementation this year. As for the specific location in Sumatra, I cannot provide those details,” he said.

Lahadalia views construction of storage tanks as a priority ahead of new refinery development. “Our fuel comes from refineries. Our refineries produce RON 98 petrol built domestically. If we have crude oil, we just need to build the refineries,” said Bahlil.

Previously, the administration of President Prabowo Subianto had planned the construction of refineries and oil storage tanks across various regions, ranging from Lhokseumawe in Aceh to Fakfak in West Papua.

This followed the submission of 18 pre-feasibility study documents related to downstream projects from the Downstream Task Force, chaired by Energy and Mineral Resources Minister Bahlil Lahadalia, to the Chief Executive Officer of the Investment Management Agency (BPI) Daya Anagata Nusantara (Danantara), Rosan Roeslani.

According to materials presented by the Energy and Mineral Resources Ministry, this project is included in the priority list for downstream development and national energy resilience, with total investment reaching Rp 232 trillion. This comprises refinery projects valued at Rp 160 trillion, which will absorb 44,000 workers, and oil storage projects valued at Rp 72 trillion, which will absorb 6,960 workers.

The refinery and oil storage construction projects will be distributed across 18 regions including Lhokseumawe, Sibolga, Natuna, Cilegon, Sukabumi, Semarang, Surabaya, Sampang, Pontianak, Badung (Bali), Bima, Ende, Makassar, Dongala, Bitung, Ambon, North Halmahera, and Fakfak.