Indonesia's Crude Oil Price Plummeted in August 2021

The Ministry of Energy and Mineral Resources (ESDM) reported that the average Indonesian Crude Price (ICP) was US$67.8 per barrel in August 2021. This price decreased by US$4.37 per barrel from the previous month, which was US$71.17 per barrel. A similar decrease occurred for Indonesia's main crude oil type, Sumatran Light Crude (SLC), falling by US$4.66 per barrel to US$67.99 per barrel.

The decrease in Indonesian crude oil prices is in line with the decline in global crude oil prices. Several factors influenced the decrease in the price of major crude oil in the international market, primarily related to increased oil supply. OPEC reported that its projected production level for this year increased by 24,000 barrels per day to 64 million barrels per day in its August 2021 publication.

Furthermore, the Energy Information Administration (EIA) report in August 2021 stated that there was an increase in global oil supply in July 2021 by 1.7 million barrels per day, reaching 96.7 million barrels per day. The report also stated that oil supply is expected to continue increasing in the coming months.

ESDM also explained that the decrease in crude oil prices was also triggered by increased supply and projected oil demand. In addition, the widespread spread of the Delta variant of the coronavirus in Asia, Australia, and America resulted in market concerns regarding oil demand.