Why is Russia Reluctant to Offer Discounted Oil Prices to Indonesia?

The Indonesian government, through the Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia, has stated that imports of crude oil from Russia will begin to be realised this month. The shipment follows up on the results of the bilateral meeting between President Prabowo Subianto and Russian President Vladimir Putin a few days ago. “For crude, it might be possible this month, insyaallah,” Bahlil said when met at the Ministry of ESDM in Jakarta on Friday (17/4/2026). In addition to crude oil, Indonesia is also purchasing liquefied petroleum gas (LPG) from Russia. “Prices will certainly be dynamic. Prices will adjust to market prices and depend on our negotiations,” he said. On the other hand, the Extraordinary and Plenipotentiary Ambassador of the Russian Federation to the Republic of Indonesia, Sergei Gennadievich Tolchenov, stated that the mechanism for exporting oil to Indonesia uses a business-to-business (B2B) scheme. Therefore, Indonesian companies and Russian companies related to oil exports can directly negotiate under the B2B scheme. On the other hand, this scheme closes off negotiations for “friendship prices” that are often requested by countries wanting Russian oil. “Because you know, from quite a few countries I hear ‘can you sell oil to us at a friendly price?’” Sergei said. “Friends, this is a market economy, there are no friends in business,” he added. Sergei stated that Russia has previously implemented a discounted pricing policy for oil and gas exports. However, this discount was applied when Russia faced sanctions from the United States and Western countries due to the conflict with Ukraine. He conveyed a message from Russia’s Deputy Prime Minister for Energy, Alexander Novak, that oil prices might even be sold higher. “There are no discounts now; sometimes there is even a premium price (higher),” he said. “So we get more money than the normal price. But this is the market economy, this is the current situation,” he added.