Amid rising global crude prices, Indonesia is intensifying its efforts to boost domestic oil exploration and production. With crude oil prices surpassing $100 per barrel, the country aims to reduce its reliance on imports and address the shortfall in national output, which currently falls below 600,000 barrels per day.
Deputy Energy and Mineral Resources Minister Yuliot Tanjung has emphasized the urgency of developing Indonesia’s domestic oil resources. From January to July 2026, the nation produced an average of around 578,000 barrels of crude oil per day, falling short of the government’s target of over 1 million barrels per day.
Several domestic oil fields show promise for increased production, with potential outputs ranging from 2,500 to 3,000 barrels per day. To capitalize on this potential, the government plans to speed up exploration and production activities in 2027 and 2028. This initiative includes offering incentives to both state-owned and private companies to stimulate investment in new projects.
The push for enhanced domestic oil production comes as Indonesia grapples with soaring oil and gas import costs. In the first seven months of 2026, imports reached $25.77 billion, marking an increase of over 40% from the previous year. This surge is largely attributed to higher imports of crude oil and petroleum products.
Despite the escalating global prices, the Indonesian government intends to maintain current subsidized fuel prices until the end of 2026, while allowing nonsubsidized fuel prices to follow market trends. This approach aims to balance economic pressures with domestic demands.