Full Breakdown
Indonesia’s May 2026 Trade Deficit Tied to Surge in Oil Imports Amid Global Energy Turmoil
7/2/2026, 10:58:01 AM
Trade Deficit Emerges as Oil Imports Soar
In May 2026 Indonesia posted a $1.61 billion trade deficit, ending a six-year surplus streak. The shortfall stemmed chiefly from a $3.76 billion deficit in oil and gas trade, with total imports reaching $17 billion from January to May and $4.51 billion in May alone.
Energy Import Dependence and Global Price Shock
Indonesia’s reliance on foreign refined fuels reflects the limited capacity of its ageing refineries. The deficit coincided with a sharp rise in global oil prices after the US-Iran conflict and the closure of the Strait of Hormuz, which pushed Brent crude above $100 per barrel before settling near $73.
Key Figures and Trade Volumes
Singapore supplied $5.1 billion of oil and gas (29.38 % of total imports), Malaysia $3.6 billion (20.54 %), and the United States $1.4 billion (8.28 %). Palm oil exports rose 7.71 % to $9.59 billion, with volume increasing from 8.30 million to 8.92 million tons between the previous year and May 2026.
Official Statements & Policy Response
BPS deputy Ateng Hartono said the deficit reflects the continued dominance of Singapore and Malaysia as suppliers and noted Brazil’s emergence as a new crude source, though exact volumes were not disclosed. He added that the modest growth in palm oil exports was insufficient to offset the oil shortfall. Energy Ministry spokeswoman Dwi Anggia announced the upcoming launch of the B50 diesel blend—50 % palm oil, a 10 % increase from the prior mandate—stating that all sectors are prepared and that the policy could save up to Rp 157.28 trillion ($8.7 billion) in foreign reserves this year.
Verbatim Quotes
- “That’s about 29.38% of the total oil and gas imports. Followed by Malaysia at $3.6 billion with a 20.54% share,” — Ateng Hartono, Deputy Head, BPS
- “There are no shifts in which country supplies our oil and gas compared to last year. However, we notice that Brazil is now our fourth largest source for crude,” — Ateng Hartono, Deputy Head, BPS
- “All sectors are ready to implement the B50,” — Dwi Anggia, Energy Ministry Spokeswoman
- “This brings exports of crude palm oil and its derivatives up by 7.71%,” — Ateng Hartono, Deputy Head, BPS
- “Singapore made up the lion's share of our oil and gas imports, reaching $5.1 billion between January and May,” — Ateng Hartono, Deputy Head, BPS
Implications for the Economy and Energy Strategy
The deficit pressures Indonesia’s foreign-exchange reserves and highlights the urgency of reducing import dependence. The B50 initiative aims to substitute imported refined fuels with domestically produced palm oil, potentially curbing future deficits while supporting the agribusiness sector.
Conflicting Reports & Data Gaps
Officials confirmed Brazil as the fourth-largest crude supplier, but did not disclose the precise import volume. Export data omit the primary destination markets for palm oil, and the actual impact of the B50 blend on import volumes will only be measurable after implementation.
Future Outlook
The B50 blend is slated for official rollout within the month, with the Energy Ministry planning to monitor reserve savings and import reductions. Ongoing volatility in global oil markets may prompt further policy adjustments or diversification of Indonesia’s energy sources.
