Indonesia has recently welcomed the first cargo of Russian crude oil under a deal Southeast Asia’s biggest economy struck with Moscow in April.
About 770,000 barrels of Russian crude oil was delivered to Indonesia’s port of Balikpapan at the end of June, per customs data by Big Trade Data cited by Bloomberg.
This was the first shipment of crude oil from Russia to Indonesia since the two countries agreed in April, at peak Hormuz crisis, on a regular supply deal.
Indonesia produces some 600,000 barrels of crude oil per day (bpd), but its consumption is far above that, at around 1.6 million barrels daily.
A lot of Indonesia’s imports of crude oil have typically come from the Middle East. But the Iran war and the Strait of Hormuz disruption forced the biggest economy in Southeast Asia to look for alternative supply, including such from Russia.
“Indonesia’s strategy to diversify its crude import basket with imports from Russia is backed by supply economics, refinery compatibility and medium-term energy security logic, not just opportunism around the Middle East crisis,” Rystad Energy analyst Prateek Panday told the Business Times in April.
Around the same time, Indonesia’s Deputy Minister of Energy, Yuliot Tanjung, said that the country would import 150 million barrels of crude from Russia this year.
The Indonesian Government has secured a strategic cooperation agreement with Russia to strengthen national energy resilience, particularly through crude oil supplies and the development of energy infrastructure, Bahlil Lahadalia, the Minister of Energy and Mineral Resources, said in April.
The follow-up cooperation covers long-term partnerships in the energy sector, including fulfilling national oil needs, the minister added.
“For crude oil, supplies are secure for one year from this month until December, so there’s no need to worry. What we need to do now is boost our refinery production,” he said.
By Charles Kennedy for Oilprice.com
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