Indonesia is intensifying its efforts to explore and produce domestic oil as global crude prices surge past $100 a barrel, underscoring the urgency to cut reliance on imports. According to Deputy Energy and Mineral Resources Minister Yuliot Tanjung, the soaring prices have prompted the government to focus on developing local oil resources, given the national production figures are still falling short of targets.
Between January and July 2026, Indonesia’s crude oil output averaged around 578,000 barrels per day, significantly below the government’s goal of over 1 million barrels daily. In response, plans are being laid out to boost exploration and production activities in the coming years, with 2027 and 2028 marked for accelerated efforts. The government is also set to offer incentives to both state-owned and private enterprises to stimulate investment in new projects.
This strategic push comes amid rising oil and gas import expenditures, which escalated to $25.77 billion in the first seven months of 2026, marking a more than 40% increase from the previous year. The spike is largely attributed to heightened imports of crude oil and petroleum products.
Despite the increase in global oil prices, the Indonesian government intends to maintain subsidized fuel prices through the end of 2026, while allowing nonsubsidized fuel prices to fluctuate with the market. Several domestic oil fields, capable of producing an estimated 2,500 to 3,000 barrels per day, are identified as potential contributors to boosting national production.