Amid rising global oil prices, Indonesia is ramping up its domestic oil exploration and production efforts to reduce reliance on imports. With crude oil prices exceeding $100 per barrel, Deputy Energy and Mineral Resources Minister Yuliot Tanjung emphasized the urgency for Indonesia to develop its own oil resources. Currently, the country’s output lags at an average of 578,000 barrels per day, falling short of the government’s target of over 1 million barrels per day.
Indonesia’s government plans to enhance exploration and production activities in 2027 and 2028. Several domestic oil fields have been identified with the potential to boost output, each capable of producing between 2,500 and 3,000 barrels per day. To encourage investment, the government intends to offer incentives to both state-owned and private companies willing to embark on new oil projects.
This strategic push comes as the country’s oil and gas import costs soar. In the first seven months of 2026 alone, Indonesia’s oil and gas imports reached $25.77 billion, marking a more than 40% increase from the same period in the previous year. This surge is largely attributed to higher imports of crude oil and petroleum products.
Despite the upward trend in global oil prices, the Indonesian government has opted to maintain subsidized fuel prices unchanged through the end of 2026. Meanwhile, prices for nonsubsidized fuels will continue to reflect market conditions.