Indonesia is intensifying its efforts in oil exploration and production as global crude oil prices surpass $100 per barrel, while the nation’s output lags behind at under 600,000 barrels per day. Deputy Energy and Mineral Resources Minister Yuliot Tanjung emphasized the urgency of developing domestic oil resources to reduce the country’s reliance on imports.
For the first seven months of 2026, Indonesia’s crude oil production averaged approximately 578,000 barrels per day, far below the government’s target of over 1 million barrels per day. Several oil fields within the country hold the potential to boost production, with some capable of yielding between 2,500 to 3,000 barrels daily.
The government aims to accelerate exploration and production activities through 2027 and 2028, providing incentives to both state-owned and private companies to invest in new projects. This initiative is driven by increasing costs of oil and gas imports, which rose to $25.77 billion in the first seven months of 2026, marking a more than 40% increase from the previous year, largely due to higher imports of crude oil and petroleum products.
Despite the rising global oil prices, Indonesia’s government plans to maintain subsidized fuel prices until the end of 2026, while nonsubsidized fuel prices will continue to reflect market conditions. The government’s strategy underscores a balance between fostering domestic production and managing the economic impact of fuel costs on the population.