Indonesia vows to buy $15 billion of US energy, slashing inflows from SE Asia

Indonesia has committed to purchase about $15 billion of US energy under a new reciprocal trade agreement with Washington, in a move that will slash flows from Southeast Asia, its energy minister said Feb. 20.

This energy buying pledge -- part of an estimated $33 billion in US goods purchases promised by Jakarta -- includes $3.5 billion of LPG, $4.5 billion of crude oil and $7 billion of gasoline, according to the agreement released by the Office of the US Trade Representative on Feb. 19.

In a press conference following the announcement, Indonesia's energy and mineral resources minister, Bahlil Lahadalia, said the deal would cut imports from its neighbors.

"The $15 billion we have allocated to buy energy from the United States does not mean we are increasing imports," Lahadalia said. "We are shifting import volumes from several countries, and the biggest portion will likely come from Southeast Asia, followed by the Middle East and Africa."

Lahadalia said the procurement mechanism would take economic considerations into account to ensure mutual benefit for Indonesia and the US, casting it as a "win-win".

Indonesia's LPG imports averaged 241,900 barrels/day in 2025, including 166,100 b/d from the US, according to data from S&P Global Commodities at Sea. The total crude and condensate imports reached 380,500 b/d in 2025, with 15,100 b/d coming from the US.

Platts, part of S&P Global Energy, assessed AGS -- the value for barrels of West Texas Intermediate Midland crude loaded on a free-on-board basis -- at $67.51/b on Feb. 19, 2026.

Indonesia is structurally dependent on gasoline imports, having received 268,700 b/d of gasoline in 2025, with Singapore and Malaysia its top suppliers. US-origin gasoline volumes to Indonesia were minimal that year.

The government will assign state energy firm Pertamina to carry out the imports, Lahadalia said. Details on the scale of supply shifts from Southeast Asia, the Middle East and Africa will be set within three weeks, while the $15 billion US energy spending commitment is final, he added.

Pertamina's president director, Simon Aloysius Mantiri, who was also present at the press conference, said the state-owned company views the new import scheme as a move toward energy self-sufficiency. About 57% of Pertamina's current LPG imports come from the US, and that share could rise to 70%, he said.

For crude oil and other products, discussions with US partners are ongoing, Mantiri said, adding that finalization of the deal will take place within 90 days of its signing.

A Singapore-based market participant said that a shift toward US supply could modify established sourcing patterns from the Middle East and regional hubs such as Singapore, but the final impact will depend on execution details, as well as contract duration and delivery schedules.

"The planned energy imports from the United States will be carried out on a business-as-usual basis, through open and transparent tender and bidding processes, without any direct appointments," Mantiri said. "Supply diversification will be pursued to safeguard energy security and secure the most competitive prices."

Pertamina initiated memorandums of understanding in July 2025 with several prospective US partners, including ExxonMobil, Chevron and KDT Global Resources, according to Mantiri.

Beyond purchasing US-origin goods, Indonesia also agreed to permit and support US investment in exploration, refining, processing and transportation of energy resources and critical minerals, with possible financing assistance from US institutions.

Jakarta also agreed not to restrict imports of US bioethanol and outlined plans to introduce E5 fuel blending by 2028 and E10 by 2030, with a possible pathway toward E20 depending on infrastructure readiness.

Upstream push

Separately, on the upstream front, Lahadalia said the government plans to extend the ExxonMobil-operated Cepu Block contract until 2055, with an additional investment of around $10 billion. Several technical issues, including the cost recovery scheme, are being finalized, and production is currently around 170,000-185,000 b/d, he said.

The Cepu Block exploration contract is due to expire in 2035. ExxonMobil first discovered the Banyu Urip field in East Java with reserves of about 450 million barrels.

Mantiri also said Pertamina had signed an agreement with Halliburton for oilfield recovery at mature domestic fields experiencing natural production declines.

Indonesia has struggled to raise crude output after years without major new discoveries. The country produced about 605,300 b/d of crude oil in 2025 and is targeting 610,000 b/d in 2026, Platts has reported.

Authorities have also said they plan to reactivate idle wells and to push exploration in eastern Indonesia through more attractive terms.

Tariff barriers

The bilateral deal will see Indonesia remove tariffs on over 99% of US products, while the US will maintain a 19% reciprocal tariff on imports from Indonesia, although certain textile and apparel goods will receive a 0% tariff rate.

The US currently has its 15th-largest goods trade deficit with Indonesia, totaling $23.7 billion in 2025.

"President Trump has delivered a forward-looking, expansive trade deal in one of the biggest markets in Southeast Asia, benefitting American workers, exporters, farmers, and digital innovators," the White House said.

Ahead of Indonesian President Prabowo Subianto's meeting with Trump to finalize the trade agreement, Jakarta announced that Indonesian and US companies signed 11 deals worth $38.4 billion on Feb. 18 across mining, energy, agribusiness, textiles, furniture and technology sectors.