Indonesia’s Crude Price Falls to $71.11 as Trade Tensions and Oversupply Weigh on Global Oil Market

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JAKARTA, investortrust.id – The Indonesian government has set the country’s benchmark crude price at $71.11 per barrel for March 2025, reflecting a $3.18 decline from the previous month, amid growing concerns over global demand and rising supply risks.

The Indonesian Crude Price, or ICP, was formalized under the Ministry of Energy and Mineral Resources Decree No. 143.K/MG.01/MEM/2025, issued on Wednesday, April 16.

Chrisnawan Anditya, Acting Head of the Ministry’s Bureau of Communications, Public Information Services, and Cooperation, said the decline tracked a broader drop in global crude prices, driven by fears that higher US trade tariffs could disrupt economic growth and suppress energy demand.

“The weakening in major international crude benchmarks was partly triggered by market anxiety over potential US tariff hikes, which could weigh on the global economy and lower demand for crude oil,” Chrisnawan said in Jakarta on Thursday, April 17.

He added that expectations of higher supply from OPEC and its allies—commonly referred to as OPEC+—also pressured prices. The group signaled its intention to raise output starting April, following calls by the US President urging oil producers, including Saudi Arabia, to help bring prices down.

Market sentiment was further dampened by rising US crude inventories. Commercial oil stockpiles in the United States increased by 3.2 million barrels during mid-March to reach 437 million barrels, compared to the end of February. This buildup aligned with seasonal refinery maintenance, which typically reduces demand for crude during the lead-up to the summer driving season.

Refinery utilization rates in both the US and Europe also declined as plants entered scheduled maintenance phases ahead of peak summer fuel consumption.

In Asia, oil prices were affected by buying slowdowns from China’s independent refiners, known as “teapots”—major buyers of sanctioned crude. These refiners began pausing their purchases to assess potential consequences of new US sanctions targeting a Chinese refiner linked to Iranian oil transactions.

“Many traders in Asia have become cautious about buying Iranian crude and are waiting to see how peace talks between Ukraine and Russia evolve. A breakthrough could potentially ease sanctions on Russian oil,” Chrisnawan added.

Here’s how major global oil benchmarks moved in March 2025 compared to February: