“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.
See also: Singapore’s energy vulnerability paradox: How board directors must navigate hidden energy risks
“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.
