JP Morgan says Indonesia is resilient in facing global energy price shocks

When low energy import dependency is combined with high energy resilience, Indonesia’s position remains impressive at third place globally.

Jakarta (ANTARA) - The largest multinational financial services and investment bank in the United States, JP Morgan, has placed Indonesia among the most resilient countries in the world in facing global energy price shocks.

“When low energy import dependency is combined with high energy resilience, Indonesia’s position remains impressive at third place globally,” wrote Michael Cembalest, Chairman of Market and Investment Strategy at J.P. Morgan Asset & Wealth Management, in his report titled Pandora’s Box: The Global Energy Shock of 2026, quoted from Jakarta on Thursday.

The report analyses 52 countries with the largest final energy consumption, which collectively represent 82 per cent of global energy consumption.

In the Total Protection Factor indicator, which measures the proportion of a country’s energy protected from international oil and gas price fluctuations, Indonesia ranks second in the world. This position is below South Africa.

Michael Cembalest sees Indonesia’s main strength lying in its domestic energy foundation.

As the world’s largest exporter of thermal coal and the 13th largest global natural gas producer, he views Indonesia as having significant production capacity, reaching around 2.465 billion cubic metres in 2024.

“In addition, the diversity of the national energy mix, which includes hydropower, geothermal, and biodiesel, makes Indonesia’s energy system more resistant to turbulence in any single commodity,” he wrote.

Furthermore, JPMorgan notes that Indonesia’s Insulation Factor reaches 77 per cent, one of the highest in the world. This figure reflects Indonesia’s ability to meet most of its energy needs from domestic sources.

This situation is in stark contrast to countries like Japan, South Korea, Singapore, and Taiwan, which are almost entirely dependent on energy imports.

Nevertheless, JPMorgan highlights several challenges still facing Indonesia. Declining domestic oil production amid rising consumption, reliance on US dollar payments for energy imports, and potential surges in energy subsidies if global prices remain high are risk factors that need to be anticipated.

In the report, JPMorgan also identifies several countries most vulnerable to global energy shocks, including Italy, Taiwan, Japan, South Korea, Singapore, Spain, and the Netherlands.