US-Venezuela Conflict: Limited Impact on Indonesia's Oil Sector

Background

The recent military operation by the United States in Venezuela, resulting in the capture of President Nicolas Maduro, has sent shockwaves through global oil markets. Venezuela, with 303.22 billion barrels of proven oil reserves, is one of the world's largest oil holders ¹

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Government Response

Indonesian authorities have quickly moved to reassure the public about the stability of the country's fuel supply. The Ministry of Energy and Mineral Resources (ESDM) stated that Indonesia's crude oil sources are not from Venezuela, thus minimizing potential supply chain disruptions ³

. Director General of Oil and Gas at ESDM, Laode Sulaeman, emphasized that the government is continuously monitoring the situation and is prepared to take necessary measures ³

Source 3

https://finance.detik.com/energi/d-8293498/pemerintah-jamin-pasokan-bbm-aman-sumbernya-bukan-dari-venezuela

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Source 6

https://industri.kontan.co.id/news/kementerian-esdm-pastikan-konflik-di-venezuela-tak-ganggu-pasokan-migas-ri

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Market Impact

While the conflict initially caused a US$2 per barrel increase in global oil prices, experts believe this surge is temporary ⁴

. The limited impact is attributed to Venezuela's current production being less than 1% of global oil production. Moreover, global oil markets are currently in a surplus condition, further cushioning the impact ⁴

Source 4

https://newssetup.kontan.co.id/news/geopolitik-memanas-bbm-nonsubsidi-ri-terancam-ikut-naik

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Economic Implications

The potential indirect effects on Indonesia's economy through nonsubsidized fuel prices remain a concern. As a net oil importer, Indonesia could face higher costs if global oil prices continue to rise ⁴

. However, the overall impact is expected to be limited due to Indonesia's diversified oil import sources.

Expert Analysis

Economist Muhammad Ishak Razak from CORE Indonesia notes that while there's potential for short-term price volatility, the long-term impact could be mitigated if Venezuela's political transition leads to increased investment in its oil sector ⁴

. This could potentially stabilize global oil supplies and prices.