Indonesia has negotiated a massive deal with Russia for the supply of 150 million barrels of crude oil at a special discounted price. The agreement was finalized during Indonesian President Prabowo Subianto’s visit to Moscow in mid-April 2026. Jakarta intends to use this supply as a strategic buffer to mitigate potential economic shocks caused by the conflict in the Middle East.
Context of Russian Discounts:
- The Chinese Experience: Over the past four years (2022–2025), China has saved nearly $12 billion through discounts on Russian oil.
- Dynamics for the PRC: In 2025, the discount totaled $2.2 billion. Despite this, Russia’s export revenue from China dropped by 20% (to $45.9 billion), while the physical volume of purchases by Beijing fell by 8%.
- Current Situation: At the end of 2025, Russian crude traded on average 8.3% cheaper than international benchmarks.
Analytical Summary
The 150-million-barrel deal with Indonesia is a textbook example of “oil dumping” in the face of severe international isolation. With China—Russia’s key buyer—beginning to scale back imports (notching a drop of 8% to 40% across various categories), Moscow desperately needs new large-scale markets, even if they must be secured through massive discounts.
Why this is a win for Indonesia and a risk for the RF:
- Jakarta’s Energy Security: By securing oil below market rates, Indonesia is hedging against supply disruptions from the Middle East. It is a calculated move to strengthen their domestic economy using cheap resources.
- The Kremlin’s Forced Generosity: For Russia, this is less about profit and more about geopolitical survival. To maintain production levels and ensure a flow of foreign currency (even at reduced volumes), Moscow must accept the buyer’s terms.
- Dependency on Discounts: Statistics from the China trade reveal a dangerous trend: discounts are rising while total revenue is falling. The pivot to Indonesia confirms that Russian oil is becoming a “discounted commodity” by default, which in the long run depletes the resource rent that sustains the national budget.
This deal also appears to be an attempt by Moscow to diversify its exports to avoid total dependence on the whims of Beijing and New Delhi. However, the price of this diversification is billions of dollars in lost profits, effectively subsidizing the economies of Southeast Asian nations.