Indonesia is considering shifting some of its crude oil imports from Middle Eastern countries to other countries including the US, following the disruption of vessel movements through the strait of Hormuz.
Indonesia's crude supply from Middle Eastern countries passes through the strait of Hormuz and makes up about 25.36mn bl or 19pc of national demand, energy minister Bahlil Lahadalia said on 3 March. But traffic through the strait — the world's most critical oil and LNG shipping lane — has almost ground to a halt since US and Israeli forces struck Iran on 28 February, with a number of vessels being attacked since then.
As part of its mitigation strategy to ensure it has enough supply to meet domestic needs, the government is shifting some crude oil imports from Middle Eastern countries to other countries with more secure supplies, including the US, according to the energy ministry. But more details including possible import figures were not disclosed.
Meanwhile, Indonesia currently has sufficient fuel reserves for about 20 days, Bahlil said on 2 March. But fuel imports are relatively smooth, he said.
Indonesia last month signed a trade deal with the US, where it agreed to purchase US energy products totalling $15bn, including $7bn of refined gasoline and $4.5bn of crude. But the country will not increase overall import volumes, and will instead cut some imports from several countries in southeast Asia, the Middle East and Africa, said Bahlil following the signing.
Indonesia currently sources most of its Middle Eastern crude from Saudi Arabia, importing around 2–3mn bl/month of Arab Light and Arab Medium grades, according to Kpler data, with the other grades being lighter crude sourced from the US or West Africa region. The volumes from Saudi Arabia are almost exclusively delivered to the 348,000 b/d Cilacap refinery in Central Java, which is configured to process heavier crude slates.
One to two crude tankers chartered by state-owned refiner Pertamina remain stranded in the Mideast Gulf region, sources said, potentially disrupting feedstock deliveries to Cilacap. Market participants suggest a 10–14 day operational buffer exists before the refiner must boost throughput to manage dwindling inventories while awaiting replacement cargoes, which face extended voyage times from alternative origins.
Gasoline term concluded, outlook uncertain
Pertamina, Asia-Pacific's largest gasoline buyer, has meanwhile concluded its second-quarter term tender on 27 February for gasoline and is expected to import around 9mn bl/month over April–June 2026, slightly higher compared with its first-quarter negotiated volumes of around 8mn bl/month.
The refiner is currently managing gasoline inventories cautiously, adopting a wait-and-see approach as the situation in the Middle East evolves, said a source close to the company. But any sustained run reductions at Cilacap would likely translate into increased spot gasoline buying.
Pertamina is typically price-sensitive and may initially draw down domestic stocks, but a prolonged refinery slowdown would eventually necessitate additional spot procurement in the coming months, traders said.
One mitigating factor is the anticipated restart of its Balikpapan residual fluid catalytic cracker (RFCC) at the end of March. This should reduce gasoline import requirements by around 40,000–45,000 b/d, partially offsetting the impact of crude supply disruptions. But as the RFCC unit is technically complex and a challenging unit to start up, the ramp-up will be gradual rather than immediate, potentially limiting the extent to which higher domestic production can offset import requirements in the near term.
