Indonesia Strikes Major Energy Deal With Russia to Build Refineries and Secure Crude Supply

JAKARTA, Investortrust.id — Indonesia is pivoting toward Moscow to shore up its energy defenses, securing a massive deal that includes guaranteed crude oil supplies and the construction of critical midstream infrastructure. Energy and Mineral Resources Minister Bahlil Lahadalia confirmed on Thursday that Russia has committed to building new oil refineries and storage hubs in Indonesia, a move aimed at ending the country's chronic dependence on imported refined fuels.

This partnership marks a significant shift in Southeast Asia’s largest economy as it navigates a volatile global energy market. By integrating Russian investment into its domestic refinery sector, Jakarta is attempting to fix a structural deficit: Indonesia consumes 1.6 million barrels of oil daily but produces only about 600,000 barrels. If successful, these refineries will allow Indonesia to process cheaper raw crude internally, shielding the state budget from the high costs of importing finished petroleum products.

Building the Infrastructure of Sovereignty

Following a briefing with President Prabowo Subianto at the Presidential Palace, Bahlil revealed that the collaboration will involve both government-to-government (G2G) and business-to-business (B2B) frameworks. While the exact dollar value of the investment is still being finalized, the Minister noted that the two nations are in the final "one or two rounds" of negotiations regarding the refinery and storage projects.

“The news is quite encouraging; we will receive crude supplies from Russia, and they are also ready to build several important infrastructures to increase our national energy reserves and security,” Bahlil told reporters on April 16, 2026. He emphasized that these storage facilities are vital for increasing the national "buffer" to prevent supply shocks during geopolitical turbulence.

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Closing the 1-Million-Barrel Gap

Indonesia’s domestic "lifting" or production currently hovers between 600,000 and 610,000 barrels per day, leaving a massive 1-million-barrel-per-day shortfall that must be met through imports. Bahlil reported that the crude supply portion of the deal is effectively finalized, ensuring Indonesian refineries have enough feedstock to operate through at least the end of 2026.

“For crude, for one year starting this month until December, God willing, it is safe. We don’t need to worry; we just need to increase the production of our refineries,” Bahlil stated. The government is also exploring similar "diversification" strategies for LPG, as Indonesia currently imports 7 million tons of cooking gas annually.

Geopolitics and the "Free and Active" Doctrine

The deal is a direct result of President Prabowo Subianto’s visit to the Kremlin on April 13, where he met with Vladimir Putin to discuss strategic cooperation. Despite potential pressure from Western allies, Jakarta is leaning into its "Free and Active" foreign policy, which Bahlil described as also being an "Active Free Economy" policy.

“We can shop anywhere as long as we are committed to the countries we have invited to cooperate, including Russia, Africa, Nigeria, and specifically our agreements with the United States,” Bahlil explained. He noted that with an annual requirement of 300 million barrels of crude, Indonesia must take every profitable opportunity to secure its national interest.