Strait of Hormuz Closed as Bahlil Reveals US Oil Imports Have Already Been Under Way
Indonesia’s Energy and Mineral Resources Minister Bahlil Lahadalia said that crude oil imports from the United States, as part of a shift away from the Middle East, have begun gradually. However, imports cannot be stepped up all at once due to limited crude oil storage capacity. ‘Now it’s starting to run. Gradually, yes, gradually,’ he said after an iftar event at the Ministry of Energy and Mineral Resources in Jakarta on the evening of Wednesday 4 March.
In addition to redirecting crude oil imports from the Middle East to the United States, Indonesia is responding to the US-Israel-Iran conflict by accelerating storage development. The government will increase storage capacity from a maximum of 25–26 days to 90 days, or three months, in line with international standards. ‘I have reported to the President (Prabowo Subianto) and the President has directed that it be built immediately. Why? We need survival,’ he said.
Indonesia has secured investors for the planned storage, which would be located in Sumatra. The storage project is currently undergoing a feasibility study before construction. Bahlil aims for construction to begin this year.
Indonesia’s energy resilience has become a public concern amid the conflict in the Middle East. On Saturday 28 February, the United States and Israel launched a series of strikes on targets in Iran, including Tehran, causing damage and civilian casualties. Iran retaliated by launching missiles at Israel and US military facilities in the Middle East.
On Sunday 1 March, US President Donald Trump claimed the Iranian Supreme Leader Ayatollah Ali Khamenei had died in the joint attack. Iranian state television confirmed the death of Ayatollah Ali Khamenei as a result of the strike. Iranian media reported that the Strait of Hormuz had been ‘effectively’ closed following the strikes, though there has been no formal blockade announcement. The Strait of Hormuz handles around a fifth of world oil trade and large volumes of LNG exports from Qatar and the United Arab Emirates. About 20% of daily global oil consumption, or around 20 million barrels, passes through this corridor.