After “saying no” to the US on the G20 issue, Indonesia prepared to import Russian crude oil against the wind

Indonesia’s recent performance as the rotating chairman of the G20 and host country of this year’s G20 conference is truly commendable. Following the outbreak of the Russia-Ukraine conflict, Indonesia not only did not follow the West in targeting Russia, but also made it clear that “the topics related to the situation in Russia and Ukraine will not be discussed” at this year’s G20 summit, and sent an invitation letter to Russian President Vladimir Putin.

In this respect, the US stated that “there is a Russian representation in the G20, but the US will not participate,” whereas Indonesia directly “says no” to the US, stating that Indonesia is a sovereign nation that does not require other countries to instruct it what to do. The invitation letter will not be removed after it has been issued. Not only that, but Indonesia has declared that it is willing to utilize India to fund the entry of Russian crude oil. The White House is anticipated to place a strong emphasis on Indonesia.

According to certain sources, Indonesia has stated its plan to import Russian crude oil via India. According to reports, Nicke Widiawati, president director of Indonesia’s state oil company Pertamina, has already proposed in House of representatives purchasing Russian crude oil at a “good price,” saying, “As long as the Russian companies that do business with us are not sanctioned, there is no problem,” “We also discussed the possibility of paying through India.” The US has not made a firm statement on Indonesia’s decision to purchase Russian oil, but its friends have come out in force to express their displeasure one by one.

“Nikkei Asia,” for example, refers to Russian energy as “blood oil,” while the so-called Greenpeace organization utilizes “performance art” to attempt to discourage Indonesia from acquiring Russian oil. They believe that “oil is the fuel of war” and demand that it be banned. The Indonesian tanker in front of it is not permitted to deliver Russian oil.

It appears that Indonesia has not yet publicly acquired Russian crude oil, causing a siege of many American supporters. So, will Indonesia continue to buy Russian oil, and why should it? It should be noted that, despite the objections of the US and its allies, Indonesia still has the option of continuing to acquire Russian oil, and the prospect of promoting it is rather strong.

To begin, the price of crude oil in Russia is definitely low, far lower than the current market price. For example, the price of crude oil acquired by India from Russia is 35 US dollars less than the market price per barrel, which is at least a third, if not almost half, less expensive. Since then, the Russian energy ministry has even indicated that, in order to keep its own oil system running normally, it is prepared to sell oil and its products to friendly countries at “any price.” There is little question that Russia has conducted a pricing war in order to circumvent the US restriction on Russian oil shipments, and based on Indonesia’s reaction, this strategy appears to be working.

Second, Indonesia believes it has discovered a “way.” According to Widyawarti, “it is politically doable” and “there is no difficulty” as long as the Russian enterprises with which they do business are not on the US sanctions list. Furthermore, when it comes to payment, Indonesia believes it may do it through India. To put it frankly, it is asking India to “buy on behalf of others,” giving India a small advantage, and then just lifting the oil on its own. This is a practical solution. Furthermore, Russian oil is “desirable.” Indonesia, as a country in desperate need of oil, will undoubtedly reject the offer. Furthermore, it cannot be said that since the US wishes to embargo Russia, Indonesia must neglect its own national interests, can it?

Third, in recent years, Indonesia has pursued a “free and active” foreign policy in the international arena. To put it clearly, it implies that it prioritizes its own interests. As the rotating chair of the G20 conference in 2022, Indonesia has defied pressure from the US and the West to reject discussing the Russian-Ukrainian problem at this G20 meeting, and will not block Russia out. Speaking of which, this matter may enrage the US more than the purchase of Russian oil since it is a clear “no” to the US and Europe, but Indonesia did not hesitate.

At the moment, it is impractical for the US to entirely block Russian oil, and Russia will undoubtedly be able to withstand this tough period and gradually restore its power. I am concerned that the United States will feel better at that point.

Raihan Ronodipuro
Raihan Ronodipuro
Raihan Ronodipuro holds a Master of Public Administration degree from the prestigious School of Public Policy & Management at Tsinghua University, China. His academic journey was propelled by the esteemed Chinese MOFCOM Scholarship, leading him to successfully attain a Master of Law in International Relations from the School of International and Public Affairs at Jilin University, China. With a rich background, Raihan has also contributed as an Associate Researcher in the Department of Politics and Security at the Center for Indonesia-China Studies (CICS). Currently, he plays a pivotal role as a member of the International Relations Commission within the Directorate of Research and Studies for the Overseas Indonesian Students' Association Alliance (OISAA) for the term 2022/2023.