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Under this new agreement:
Indonesia will buy $15 billion worth of energy products from the US.
This includes gasoline, crude oil, and LPG (liquefied petroleum gas).
The purchases will happen in stages, not all at once.
Indonesia wants to make sure the prices are competitive and economically beneficial.
“We’re designing a framework for this,” said Lahadalia. “We will stop or reduce buying oil and gas from other suppliers in the Middle East and Asia.”
Indonesia is one of the biggest economies in Southeast Asia. In 2023, it imported around $36 billion worth of oil. So this deal with the US could change where the country gets a big part of its energy.
Right now, the top oil suppliers to Indonesia are:
Singapore
Malaysia
Saudi Arabia
The United States is also a supplier, but it's not at the top yet. This new deal could change that.
This energy deal is part of a larger trade agreement between the US and Indonesia.
Before the deal:
The US had planned to impose a 32% tariff on Indonesian goods.
That high tariff could have hurt Indonesia’s exports badly.
But now, under the agreement:
The tariff will be reduced to 19%.
In return, Indonesia has agreed to import more from the US; over $22 billion worth of goods.
This includes $4.5 billion of US agricultural products like soybeans, wheat, and cotton.
Indonesia will also buy Boeing aircraft worth $3.2 billion.
The Indonesian government says this deal protects jobs and trade balance.
“If the US imposed a 32% tariff, it would basically stop trade,” said Airlangga Hartarto, Indonesia’s Coordinating Minister for Economic Affairs.
“That kind of tariff is like a trade embargo. It could affect around 1 million workers in labor-heavy industries.”
He added that the government’s decision to work with the US will help keep trade stable, protect local jobs, and maintain economic growth.
Indonesia is one of three Southeast Asian countries that have made such trade agreements with the US. These deals come after negotiations with US President Donald Trump’s administration, aimed at lowering tariffs while increasing American exports.
The US is already Indonesia’s second-largest export market, just behind China.
In 2024, Indonesia’s exports to the US were valued at over $26 billion.
Indonesia also had a trade surplus of $16.8 billion with the US in the same year.
This means Indonesia sells more to the US than it buys from it.
By agreeing to zero tariffs on almost all US goods, and removing non-tariff barriers, Indonesia is making it easier for American companies to do business there.
The full details of the deal are still being finalized. But the impact is already clear:
The US will become a major supplier of energy and goods to Indonesia.
Indonesia will cut back on imports from countries it usually relies on, like those in the Middle East and Asia.
The agreement is expected to strengthen economic ties between Indonesia and the US.
The Indonesian government says all decisions will be based on economic logic. If US prices are fair and competitive, the country will keep buying. If not, they’ll look at alternatives. But for now, Washington is moving up the list as a major energy partner for Southeast Asia’s largest economy.
