Indonesia is intensifying efforts to explore and produce oil domestically as global crude oil prices have surged past $100 per barrel, while the nation’s output lags behind at under 600,000 barrels per day. According to Deputy Energy and Mineral Resources Minister Yuliot Tanjung, the increase in global prices underscores the urgency to develop local oil resources and decrease reliance on imports.
Between January and July 2026, Indonesia’s crude oil production averaged approximately 578,000 barrels per day, falling short of the government’s target of more than 1 million barrels per day. To address this gap, the government plans to boost exploration and production activities in 2027 and 2028. This initiative includes offering incentives to both state-owned and private companies to spur investment in new projects.
The push for increased domestic production comes as Indonesia faces rising costs for oil and gas imports, which totaled $25.77 billion in the first seven months of 2026. This figure marks a more than 40% increase from the same period the previous year, driven largely by higher imports of crude oil and petroleum products.
Several domestic oil fields have shown potential for increased output, with some capable of producing an estimated 2,500 to 3,000 barrels per day. The government aims to tap into these resources to meet its production goals.
Despite the global price hike, the Indonesian government intends to maintain subsidized fuel prices at current levels through the end of 2026, while allowing nonsubsidized fuel prices to align with market conditions.