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OPEC+ supply cut poses ‘concern’ for net oil-importing Indonesia
OPEC+’s move to slash production by about two million barrels per day – which will further tighten global crude supply – will not affect Indonesia much now, experts say, but the decision serves as yet another reason for the nation to quickly address its oil net-import problem.
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The Oyong oil and gas rig in the Sampang block, located in the Madura Strait off the coast of East Java, is pictured in this undated photo. (SKK Migas/SKK Migas)
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PEC+’s move to slash production by about two million barrels per day – which will further tighten the global crude supply – will not affect Indonesia much now, experts say, but the decision serves as yet another reason for the nation to quickly address its oil net-import problem.
Faced with uncertainties, Saudi Arabia and Russia – both leaders of the OPEC+ energy cartel – agreed on Wednesday to cut the production of two million barrels of oil per day, which was the first large production cut in over two years in a bid to raise crude prices.
Two million barrels a day represents about 2 percent of the global oil production.
“This is a global supply and demand phenomenon and the glaring issue here is, as an oil net-importer country, Indonesia is more vulnerable to the ripple effect caused by [high and volatile] global oil prices,” energy expert Widhyawan Prawiraatmadja, who is also the former deputy for planning at now-disbanded upstream oil and gas regulator BP Migas, told The Jakarta Post on Thursday.
The Energy and Mineral Resources Ministry did not immediately respond to a request for comment.
Read also: RI lacks ʻsense of urgencyʼ in oil and gas investment
Indonesia’s oil and gas imports amounted to US$3.7 billion in August this year, down 16.92 percent from the previous month but up at a staggering 80.63 percent from August last year when the country was still grappling with the COVID-19 pandemic, Statistics Indonesia (BPS) data shows.
