Indonesia's Crude Oil Price Rises to US$72.2 per Barrel Amidst Falling Oil Supply

The Ministry of Energy and Mineral Resources (ESDM) stated that the average Indonesian Crude Price (ICP) was US$72.2 per barrel in September 2021. This price increased by US$4.4 per barrel from US$67.8 per barrel in August 2021.

Citing the Indonesian Oil Price Team's Executive Summary, ESDM explained that several factors influenced the increase in the price of major crude oil in the international market, including a decrease in oil supply. First, the halt in crude oil production in the Gulf of Mexico, United States, due to Hurricane Ida and Tropical Storm Nicholas. These storms resulted in a potential loss of crude oil supply of 30 million barrels.

Second, disruptions to the crude oil supply from Libya due to protests that closed the country's crude oil export terminals. Third, the Organization of the Petroleum Exporting Countries (OPEC) in its September 2021 publication lowered its projection of 2021 crude oil supply from non-OPEC countries by 0.15 million barrels per day to 63.85 million barrels per day compared to the previous month's projection.

Finally, the International Energy Agency's (IEA) September 2021 report showed a decrease in global oil supply in August 2021 by 540,000 barrels per day to 96.1 million barrels per day.

Another reason, according to ESDM, is an increase in global crude oil demand. OPEC projected global crude oil demand in 2021 at 96.69 million barrels per day, up 0.11 million barrels per day from the previous month's projection.