Indonesian Crude Price Falls to $66.07 in August 2025 as Oversupply Weighs on Market

JAKARTA, Investortrust.id — The Ministry of Energy and Mineral Resources sets Indonesia’s crude oil benchmark price at $66.07 per barrel for August 2025, down from $68.59 in July. The decline reflects oversupply from higher U.S. and OPEC+ output, weaker seasonal demand, and market concerns over trade and monetary policy.

The ministry determined the benchmark price, known as Indonesian Crude Price (ICP), was outlined in a ministerial decree issued on Wednesday, Sept. 10, 2025.

According to the ministry, both the Indonesian crude price and international oil benchmarks fell in August as U.S. shale output and OPEC+ production climbed, creating surplus supply. At the same time, demand eased after the end of the summer driving season in the northern hemisphere.

Director General of Oil and Gas at the ministry Laode Sulaeman said on Monday, Sept. 15, 2025, that trade policy was another factor weighing on the market. “The potential slowdown of the global economy due to U.S. tariffs on several countries also contributed to weaker crude prices,” he said.

OPEC projected further production growth in 2025. U.S. output is expected to rise by 300,000 barrels per day year-on-year to 22.1 million barrels per day, driven by productivity gains in shale basins. China’s output is also projected to grow by 34,000 barrels per day year-on-year to 4.6 million barrels per day, largely from offshore fields in the Bohai Bay and South China Sea.

Laode added that U.S. tariffs on India, raised to 50 percent on Aug. 27, 2025, because of its continued imports of Russian oil, also rattled markets. “This raised concerns over the stability of India’s economy as one of the world’s major oil consumers,” he said.

Another risk came from the United States, where President Donald Trump’s plan to dismiss the Federal Reserve Governor sparked fears over central bank independence. Markets worried this could undermine the Fed’s ability to ensure price stability, potentially triggering higher interest rates and volatility in both the U.S. and global economies.

In Asia, Indian refiners showed caution in buying Russian crude following the tariff hikes, signaling a shift toward arbitrage crude from Western suppliers. Several refineries in the region also entered maintenance shutdowns, reducing demand across Asia Pacific.

Global oil benchmarks moved in the same direction as the Indonesian crude price during August 2025. Dated Brent declined by $2.78 to $68.21 per barrel, while West Texas Intermediate (Nymex) slipped by $3.22 to $64.02 per barrel.

Brent traded on ICE fell by $2.29 to $67.26 per barrel. The OPEC basket dropped by $1.26 to $69.69 per barrel. Indonesia’s own benchmark recorded the sharpest decline among regional peers, falling by $2.52 to $66.07 per barrel.

Fiscal Implication

The decline in Indonesia’s crude benchmark to $66.07 per barrel also carried fiscal implications. In the 2025 state budget, the government had set an oil price assumption of $82 per barrel, meaning the realized price was well below the baseline.

According to the fiscal risk sensitivity analysis in the 2025 State Budget Financial Note, every $1 drop in ICP reduces government oil and gas revenues by about Rp 3.2 trillion but also cuts energy subsidy spending by around Rp 6.9 trillion. 

As a result, the net effect of lower ICP is a narrowing of the state budget deficit. If the downward trend in oil prices persists, the government’s fiscal position could actually improve in 2025, giving more room to manage other spending priorities without expanding public debt.

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