Indonesia threatens to stop oil imports from Singapore

Market: Oil products
09/05/25

Indonesian market participants have reacted with caution to a call by the country's energy minister to stop all oil imports from Singapore.

Energy and mineral resources minister Bahlil Lahadalia said on 8 May that Indonesia should stop purchases from Singapore and instead buy directly from oil producers in the Middle East, according to media reports that were confirmed by several Indonesian market participants.

Discussions are taking place but there is so far no official statement from the ministry nor any direction from managers in the oil industry, one market participant said.

"None of us are taking it seriously" and it is still "business as usual", the official said.

The regional trading hub of Singapore is a major supplier of oil products to Indonesia, and any end to shipments from the country would upend trade flows.

Singapore is the biggest gasoline supplier to Indonesia, accounting for more than 60pc of total shipments, according to customs data. Singapore exported 236,000 b/d of gasoline to Indonesia in 2024, with Malaysia a distant second at 79,500 b/d.

Singapore is also one of Indonesia's top gasoil and jet fuel suppliers, shipping over 54,000 b/d of gasoil and 8,300 b/d of jet fuel to the country in January-April this year, according to data from government agency Enterprise Singapore.

The government has already begun to build docks that can accommodate larger, long-haul vessels, Bahlil said, according to state-owned media.

Any move by Indonesian importers to switch purchases to the Mideast Gulf would increase the replacement cost of supply because of higher freight rates, said market participants.

Indonesian buyers are currently negotiating term contracts on a fob Singapore basis, so a sudden cut in supplies would not be feasible. The term contract is due for renewal soon, traders said. State-owned oil firm Pertamina, the dominant products importer, is expected to begin term negotiations for its second-half 2025 requirements in May-June.

A decision by Indonesia to end imports from Singapore would cut regional gasoline demand but could be bullish for the market overall, given the extra logistics required to blend elsewhere and ship into southeast Asia.

The Mideast Gulf currently supplies mainly Pakistan and Africa, with just 15pc of gasoline exports from the region heading towards Indonesia and Singapore in 2024, according to data from ship tracking firm Kpler.

Indonesia's energy ministry (ESDM) did not immediately reply to a request for confirmation of Bahlil's comments. They came a day after the country's president Prabowo Subianto called for Indonesia to become self-sufficient in oil in the next five years.

Indonesia has also proposed raising energy imports from the US as part of talks to reduce import tariffs threatened by president Donald Trump. Indonesia is considering boosting imports of crude, LPG, LNG and refined fuels in order to rebalance its trade surplus and ease bilateral tensions, government officials have said.

By Aldric Chew and Lu Yawen

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