Indonesia Cuts Fuel Imports from Singapore, Looks to the U.S. Amid Trade Shift

Main Takeaways

● Indonesia plans to reduce and eventually end fuel imports from Singapore, which currently make up more than half of its total fuel imports. ● The shift is part of a strategic alignment with the United States, involving energy purchases that support broader reciprocal trade negotiations. ● Indonesia is also seeking more competitive pricing, as Singapore’s fuel has proven costlier than supply from the Middle East. ● Pertamina is developing large-scale import infrastructure to accommodate the shift, with the first phase of the transition beginning in November 2025.

 

JAKARTA, investortrust.id — Indonesia has decided to reduce its reliance on fuel imports from Singapore, aiming to shift purchases toward the United States, in a move that reflects both cost concerns and shifting geopolitical alliances. The government will begin transitioning up to 59% of current imports away from the city-state starting in November 2025, according to the Minister of Energy and Mineral Resources Bahlil Lahadalia.

 

Speaking after a cabinet meeting led by President Prabowo Subianto, Lahadalia said the decision is linked to ongoing trade negotiations with Washington on reciprocal tariffs. Singapore currently accounts for over half of Indonesia’s total fuel imports, but Jakarta sees an opportunity to realign its sourcing strategy for refined petroleum products, crude oil, and liquefied petroleum gas.

 

“We will buy oil from countries other than Singapore. One of them is the United States, since we already have a trade agreement with them,” Lahadalia said during a press briefing at the ministry on Friday, May 9.

 

The minister noted that Indonesia has offered to purchase multiple U.S. energy products as part of a broader strategy to balance trade ties, though specific volumes have yet to be finalized.

 

Another factor driving the change is price. Singapore, despite being geographically closer, reportedly offers less competitive pricing than Middle Eastern exporters. "It should actually be cheaper. Why is a nearby country offering higher prices?” Lahadalia said, adding that the shift also reflects Indonesia’s efforts to navigate evolving geopolitical and geo-economic dynamics.

 

“We need to create a more balanced energy supply network,” said the former Minister of Investment.

 

The transition will not happen overnight. The minister stressed the importance of phasing out imports gradually to allow time for infrastructure development. Pertamina, Indonesia’s state energy firm, is currently constructing new port facilities capable of handling larger tankers—unlike Singapore, where smaller vessels are often used.

 

“Pertamina is now building docks for large imports. The ones from Singapore use small ships. That’s another reason. With bigger facilities, we avoid logistical bottlenecks,” he explained.