JAKARTA: Indonesia is expanding its energy security cooperation with Russia to keep domestic supplies stable, the government said on Tuesday, following President Prabowo Subianto’s meeting with Russian President Vladimir Putin.
Indonesia has been working to secure alternative supply sources amid disruptions to energy shipments from the Middle East since US and Israeli attacks on Iran caused the effective closure of the Strait of Hormuz, through which most of Asia’s energy supply transits.
Southeast Asia’s biggest economy imports about 60 percent of its fuel needs, with about 20 percent of its imported oil and LPG coming from the Middle East.
During their meeting in Moscow, Prabowo and Putin discussed ways to strengthen economic and energy ties amid uncertainties stemming from the war on Iran.
“They agreed upon several points, including long-term cooperation in the energy and mineral resources sector, which covers oil and gas security,” Cabinet Secretary Teddy Indra Wijaya said in a statement issued on Tuesday.
Both leaders also agreed to develop cooperation in technology research and agriculture, as well as possibilities of further investment in Indonesia’s industrial development, he added.
Although fuel prices have spiked in many Asian countries because of the war in the Middle East, Indonesia has so far kept prices stable for consumers. The government has designated Fridays as a remote workday for civil servants starting this month as part of a series of preventive measures to address the global supply crisis.
Energy and Mineral Resources Minister Bahlil Lahadalia said Prabowo’s meeting with Putin was part of Indonesia’s “efforts to strengthen energy diplomacy to keep domestic supplies stable” amid the global disruption.
The Indonesian government has said it has begun importing fuel from other countries since the beginning of the war on Iran, including from Nigeria, Angola and Brazil.
When it comes to Russia, Jakarta will have to balance its approach so that it does not interfere with US interests, said Nailul Huda, director of economy at the Center of Economic and Law Studies in Jakarta.
“These energy negotiations must cleverly avoid being controlled by US interests. The US government would want Indonesia to import from them, but we have to keep communication going with Russia so that the prices won’t be controlled by the US side,” he told Arab News.
The US previously prohibited countries to buy sanctioned Russian oil and petroleum products as part of reciprocal trade deals. It imposed a temporary waiver, which expired last week, allowing countries to make such purchases to keep global oil prices down.
“(Importing from Russia) is very important to secure domestic crude oil supply,” Huda said.
“We are already a net importer, so it’s only natural that we secure our supplies by diversifying our crude oil import sources.”
Prabowo also sought to consult Putin over the “global geopolitical situation” as part of his Moscow visit.
“We see that Russia has played a very positive role in the face of this uncertain geopolitical situation,” Prabowo said during the meeting.
“This is why we feel that it is very much needed for us to hold a consultation to figure out how to face this situation in the future and especially to see if we can continue to strengthen our cooperation, particularly in economy and energy.”
