As global crude oil prices surge past $100 a barrel, Indonesia is stepping up efforts to bolster its oil exploration and production. This move comes amid a backdrop of national output falling short of government targets, with production averaging around 578,000 barrels per day from January to July 2026, far below the aim of over 1 million barrels per day.

Deputy Energy and Mineral Resources Minister Yuliot Tanjung emphasized the urgency of developing domestic oil resources to mitigate Indonesia’s reliance on imports. The country’s oil and gas import costs have been rising, with expenditures reaching $25.77 billion in the first seven months of 2026, marking an increase of over 40% from the same period in the previous year. This increase has largely been driven by higher imports of crude oil and petroleum products.

Several domestic oil fields present opportunities for increased production, with potential outputs estimated at 2,500 to 3,000 barrels per day. In response, the Indonesian government plans to accelerate exploration and production activities in 2027 and 2028. To encourage investment, both state-owned and private companies will be offered incentives to engage in new projects, aiming to elevate national oil output.

Despite the rising global oil prices, the Indonesian government intends to maintain current subsidized fuel prices through the end of 2026. However, prices for nonsubsidized fuel will continue to reflect market conditions, providing a measure of stability amidst fluctuating global oil markets.