Indonesia is ramping up its oil exploration and production efforts in response to rising global crude oil prices, which have exceeded $100 per barrel. This move comes as the country’s oil output struggles to surpass 600,000 barrels per day, far below the government’s target of over 1 million barrels per day.
Deputy Energy and Mineral Resources Minister Yuliot Tanjung emphasized the urgency of enhancing domestic oil resources to mitigate Indonesia’s reliance on imports. Between January and July 2026, Indonesia’s crude oil production averaged around 578,000 barrels per day, underscoring the need for increased exploration and production.
Several oil fields within Indonesia have been identified as having the potential to boost production, with some capable of delivering between 2,500 to 3,000 barrels per day. To incentivize investment from both state-owned and private companies, the government plans to accelerate exploration and production activities in 2027 and 2028, offering various incentives for new projects.
This push for increased domestic production is partly driven by the rising costs of oil and gas imports, which reached $25.77 billion in the first seven months of 2026. This figure marks a more than 40% increase compared to the same period in the previous year, primarily due to higher imports of crude oil and petroleum products.
Despite the upward trend in global oil prices, the Indonesian government intends to maintain subsidized fuel prices at their current levels through the end of 2026. However, prices for nonsubsidized fuels will continue to fluctuate in line with market conditions.