Indonesia weighing options to boost US oil imports; costs, shipping period key challenges

Indonesia is weighing its options of increasing US oil and gas imports, in response to the latest imposition on tariffs by Washington, with logistics, landed costs, and shipping period being critical factors in the final decision, a senior official at Pertamina (Persero) said May 22.

As the country ponders its next move following US President Donald Trump's policy direction to impose a 32% tariff on several products from Indonesia, oil and gas importers are also considering some other factors, such as the availability of a distribution network and infrastructure to handle cargoes from the US, Pertamina President Director Simon Aloysius Mantiri said during a parliamentary hearing.

However, the main risk for such a shift lies in the distance and delivery time from the US -- of around 40 days -- which is much longer compared with cargoes from the Middle East or some Asian countries. If there are weather disruptions, it could directly affect Indonesia's stock resilience, Mantiri said.

"Therefore, Pertamina is currently conducting a comprehensive assessment covering technical, commercial, and operational risk aspects to ensure that the scenario of increasing supply from the US can be implemented effectively," he added.

Pertamina has also been coordinating with the government's negotiating team. Currently, the company is exploring the availability of supplies from the US and looking at cargoes that meet requirements in terms of quality, volume, and commercial aspects, he said.

Indonesia imported 512,000 b/d of crude in 2024, down 6.6%, or 36,000 b/d, from the previous year. US crude flows to Indonesia have been minimal, with flows of 28,000 b/d in 2024 and 24,000 b/d in Jan-April 2025, according to data from S&P Global Commodities at Sea.

Bilateral trade

Indonesia and the US have agreed to finalize a bilateral trade and investment framework within 60 days, with discussions taking place around some issues, including energy imports and critical mineral cooperation.

The talks come as the country plans to prioritize imports of LNG, LPG, and gasoline from the US while reducing inflows from other countries, as part of the government's efforts to negotiate lower tariffs on some Indonesian products.

However, the government, through the Ministry of Energy and Mineral Resources, had previously said that it had no plans to import LNG from the US and is instead focusing on maximizing the use of domestically produced LNG to meet national needs, Platts reported April 18.

Pertamina's Vice President Director Wiko Migantoro said the company was procuring commodities from around the world, ranging from Africa, the Middle East, Southeast Asia and the US.

"In terms of volume, some can still be shifted to the US. That is part of the negotiation. However, several things have to be taken into account, such as competitiveness and specifications, so that it does not disrupt the operating system in our country. We are still discussing this with the government, and this is ongoing," he said.

According to Mantiri, Pertamina already has regular cooperation with its US partners for oil and gas supplies. Currently, about 4% of Indonesia's total crude oil imports and about 57% of total LPG imports come from the United States, he said.

Mantiri said that to support this plan, Pertamina had requested government support in the form of regulations.

"We need policy support from the government in the form of a legal umbrella, either through a presidential regulation or ministerial regulation as the basis for implementing energy supply cooperation for Pertamina," Mantiri said.

He added that inter-governmental cooperation between Indonesia and the US would provide political and regulatory certainty. After that, the cooperation could be translated into business partnerships at the operational level.