As global crude oil prices surge past $100 a barrel, Indonesia is ramping up efforts to boost domestic oil exploration and production. Deputy Energy and Mineral Resources Minister Yuliot Tanjung emphasized that the increase in global prices has underscored the urgency of developing the nation’s oil resources to reduce reliance on imports.
Between January and July 2026, Indonesia’s crude oil production averaged around 578,000 barrels per day, falling short of the government’s target of over 1 million barrels per day. This shortfall has prompted the government to plan increased exploration and production activities in the coming years, specifically targeting 2027 and 2028. The plan includes offering incentives to both state-owned and private companies to invest in new oil projects.
The drive to enhance domestic oil output is also fueled by Indonesia’s rising oil and gas import costs, which amounted to $25.77 billion in the first seven months of 2026. This figure represents an increase of more than 40% compared to the same period in the previous year, largely due to higher imports of crude oil and petroleum products.
Despite the escalating global oil prices, the Indonesian government intends to maintain subsidized fuel prices through the end of 2026. In contrast, nonsubsidized fuel prices will continue to be subject to market fluctuations.
Several domestic oil fields in Indonesia have been identified with the potential to significantly boost production, with some fields capable of producing an estimated 2,500 to 3,000 barrels per day. The government’s strategic push aims to capitalize on these opportunities to bridge the gap between current production levels and national targets.