Indonesia is ramping up its oil exploration and production activities in response to global crude prices surpassing $100 per barrel and the country’s domestic output failing to meet targets. According to Deputy Energy and Mineral Resources Minister Yuliot Tanjung, the increase in global prices underscores the urgency for Indonesia to exploit its oil resources and lessen its reliance on imports.
Between January and July 2026, Indonesia’s crude oil production averaged approximately 578,000 barrels per day, which is significantly below the government’s target of over 1 million barrels per day. The government aims to boost production by accelerating exploration and production efforts in 2027 and 2028. To this end, incentives will be offered to both state-owned and private companies to foster investment in new oil projects.
The need for increased domestic production is further emphasized by the rising costs of oil and gas imports, which reached $25.77 billion in the first seven months of 2026—a more than 40% increase from the same period in the previous year. This surge in import costs is largely attributed to heightened imports of crude oil and petroleum products.
Despite the escalating global oil prices, the Indonesian government has decided to maintain the current prices of subsidized fuel until the end of 2026, while the prices of non-subsidized fuels will continue to adjust according to market conditions. Several domestic oil fields have been identified as having the potential to raise production, with some fields capable of producing an estimated 2,500 to 3,000 barrels per day.