Indonesia to Increase Energy Imports from US, Shifting Oil Supplies from Middle East and Singapore

Jakarta — The Indonesian government will import energy commodities valued at US$15 billion from the United States. This arrangement will significantly reshape Indonesia’s energy import sources and supply chains.

Several traditional supplier nations from Southeast Asia, the Middle East, and Africa are likely to experience reduced export volumes. Energy and Mineral Resources Minister Bahlil Lahadalia emphasised that purchasing energy from the United States will not increase Indonesia’s total import volume. Instead, the government is merely redirecting supply sources from other countries.

“We are shifting part of our import volume from several countries, including nations from Southeast Asia, the Middle East, and some African countries,” Bahlil stated during a virtual press conference.

Additionally, Bahlil explained that in practice, the procurement scheme will continue to consider mutually beneficial economic mechanisms. According to him, transactions conducted must provide benefits to both the United States and Indonesia.

Bahlil acknowledged that Indonesia’s current liquefied petroleum gas (LPG) imports are substantial, approximately seven million tonnes annually. Currently, some of this LPG supply already originates from the United States, but the volume will be increased going forward.

“Once we received direction from President Prabowo and complete the initial ninety-day period, we will immediately proceed with the execution phase so this can operate without any differing perceptions from our partners there,” Bahlil said.

According to the US Trade Representative (USTR) office documentation, the US$15 billion energy import agreement comprises petrol as the largest component at US$7 billion, crude oil at US$4.5 billion, and LPG at US$3.5 billion.

The energy commodity purchase agreement from the US is detailed in Annex IV, specifically in the industrial goods section. The second point regarding industrial goods stipulates that Indonesia must support and facilitate commercial arrangements to import energy commodities from the US valued at US$15 billion, consisting of:

Increasing imports of US metallurgical coal to support steel production, local industrialisation, and energy reliability and security, whilst reducing dependence on imports from market-manipulative actors;

Increasing imports of advanced US coal technology and partnering to accelerate the development, application, and commercialisation of such technology, including utilising all available financing mechanisms to support coal technology advancement, including using coal and coal byproducts for producing building materials, battery materials, carbon fibre, synthetic graphite, and printing materials, as well as for power generation fuel and other industrial processes;

Supporting and facilitating LPG purchases valued at US$3.5 billion;

Supporting and facilitating crude oil purchases valued at US$4.5 billion; and

Supporting and facilitating petrol product purchases valued at US$7 billion.