RI instability affects oil flows

RI instability affects oil flows

SINGAPORE (AFP): Increasing instability in Indonesia could
disrupt the oil supply balance in Asia and disturb oil flows to
Singapore and the strategic Straits of Malacca, an industry
publication said on Sunday.

Singapore-based Energy Asia said events in Indonesia,
including a recent diplomatic row with the United States, deserve
closer attention because of their potential impact on the
region's oil supply.

Indonesia produces 1.4 million barrels per day of crude
condensates and accounts for between five and 10 percent of
Japanese crude imports.

"Just when Middle East tensions are on the rise again, there's
now the added worry that Indonesia is ready to explode,
potentially disrupting domestic crude production," Energy Asia
said.

"The possibility that Indonesia's problems could even disturb
oil flows through Singapore and the all-important Straits of
Malacca must now be contemplated," it said.

It noted that Indonesia is situated "only a few kilometers
(miles) away from Singapore's 1.3 million barrels per day of
refining capacity" and was just off the Straits of Malacca,
through which all Middle East oil passes en route to Japan and
East Asia.

Separatist demands in the provinces of Aceh and Irian Jaya are
threatening to tear apart Indonesia, Southeast Asia's largest
country.

A severe economic downturn and strong challenges against
President Abdurrahman Wahid, who has been accused of weak
leadership, have aggravated Indonesia's problems.

Jakarta's latest row with the United States, during which the
American embassy closed some services and Islamic militants
searched for U.S. nationals in Irian Jaya, has added a new
dimension to Indonesia's troubles, the publication noted.