Global Oil Supply Is Tightening; Indonesia Needs to Be Vigilant

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The government is deemed to need to remain vigilant about prolonged oil price volatility stemming from increasingly tight global oil supplies.

Tightening global oil supplies is projected to trigger prolonged oil price evaporative environment. The government is also deemed to need to remain vigilant about the pressures affecting domestic energy security as well as the state budget.

The International Energy Agency’s (IEA) might 2026 report notes that global oil supplies fell by another 1.8 million barrels per day in April, bringing the total supply shortfall to 12.8 million barrels per day since the war between the United States–Israel and Iran began on February 28.

“greater than ten weeks after the war in the Middle East began, escalating disruptions to supplies through the Strait of Hormuz have been depleting global oil inventories at the fastest pace on record,” the IEA wrote in its report, as quoted on Tuesday, might 19, 2026.

The IEA also highlighted the possible to further demand declines due to the war, projecting a year-on-year contraction of 420,000 barrels per day by the end of 2026, bringing total demand to 104 million barrels per day.

The largest decline is projected to occur in the second quarter of 2026, amounting to 2.45 million barrels per day, with OECD member countries accounting to a reduction of 930,000 barrels per day and non-OECD countries contributing 1.5 million barrels per day.

while demand could rebound toward the end of the year if a peace agreement is reached that allows shipping traffic through the Strait of Hormuz to resume gradually starting in the third quarter of 2026, the recovery in supply is likely to be slower.

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