Indonesia will cut its fuel imports from Singapore and source supplies from the US and Middle Eastern countries instead, according to the country’s energy minister.
Southeast Asia’s largest economy will look to gradually eliminate its shipments of oil products from Singapore, which account for more than half its imports, Energy Minister Bahlil Lahadalia told reporters on Friday. Purchases will be switched to suppliers in the US and Middle East as Indonesia seeks lower prices and a “better balance” in the changing global geopolitical environment, Lahadalia said.
“It is not only a matter of price but also geopolitical issues, we need to have a balance with other countries,” Lahadalia said, adding that imports from Singapore would be reduced to zero “some day”.
Indonesia is among several countries seeking to rebalance their trade relationships with the US to avoid President Donald Trump’s punitive tariffs. Officials in Jakarta have offered to boost purchases of American commodities like oil and liquefied petroleum gas.
While Singapore has no crude oil production of its own, the city-state is a refining hub and a major supplier of products to other countries in the region.
That includes Indonesia, whose own output of the fossil fuel has shrunk over the years and which imports about 290,000 barrels per day of liquid refined fuels from its smaller neighbour, according to analysis from Sentosa Shipbrokers. Most of those flows from Singapore consist of gasoline and gasoil.
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“If these plans come to fruition it would certainly be a noticeable reshuffle for the tanker market,” said Sentosa.
Lahadalia said the cuts would begin within six months and that state oil firm, PT Pertamina, is building jetties to accommodate larger tankers. He had said earlier this week that Indonesia would suspend its oil imports from Singapore for six months.
