JAKARTA: Indonesia will reduce oil and gas imports from Middle Eastern and Asian countries, Energy and Mineral Resources Minister Bahlil Lahadalia said, as Jakarta moves to implement its $15 billion energy deal with the US under the latest tariff agreement.
Indonesia is among three Southeast Asian countries that have struck deals with Washington so far, following negotiations with US President Donald Trump to lower tariff rates.
Jakarta has agreed to increase its imports from the US by more than $22 billion — including energy products — under the framework trade deal, while US tariffs on Indonesian imports would be set at 19 percent.
“We have agreed to buy $15 billion worth of gasoline, crude oil and LPG (liquefied petroleum gas), which we will do in steps by considering its economic viability. The prices must be competitive, and now we’re designing a framework for it,” Lahadalia told reporters in Jakarta on Monday.
“We will reduce (imports) from other countries (in) the Middle East and Asia.”
Southeast Asia’s biggest economy’s oil imports were valued at about $36 billion last year.
While the US is among Indonesia’s top oil suppliers, Washington still ranks behind Singapore, Malaysia and Saudi Arabia.
The US deal, which is expected to be finalized in the coming weeks, allows Indonesia to avoid the higher tariff rate of 32 percent threatened earlier by the Trump administration.
“We know that 32 percent (tariff rate) means no trade, which basically means a trade embargo, and that means around 1 million workers in labor-intensive sectors can be impacted,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in a statement.
“What the government is doing through this cooperation with the US is to keep the internal and external balance so that we can maintain our trade balance, keep our economic momentum and ensure job creation.”
The US is Indonesia’s second-largest market after China, with exports valued at over $26 billion in 2024, according to Indonesia’s statistics agency.
Indonesia has consistently posted trade surpluses with the US in the past decade, including $16.8 billion last year.
Under the tariff agreement, Jakarta agreed to drop its tariff on nearly all American imports to zero and scrap all non-tariff barriers facing American firms, while also committing to purchase $4.5 billion worth of agricultural products from the US, including soybeans, wheat and cotton, as well as Boeing aircraft valued at $3.2 billion.
