Indonesian State-Owned Refiner Considers Russian Oil Amid Sanction Constraints

Indonesia’s state-owned refinery Pertamina is reportedly seeking to purchase Russian crude oil grades for the first time in over a decade, according to a Reuters report on July 23. Pertamina has included Russian Urals oil, along with other grades such as ESPO Blend and Sokol, in its upcoming September tender lists for delivery to its Cilacap refinery.

The last instance of Pertamina purchasing ESPO Blend and Sokol oil from Russia dates back more than 10 years, as noted by the London Stock Exchange Group. The company’s tender also includes other sour and sweet crude oil grades, specifying delivery periods in mid-September.

The tenders recently conducted are awaiting results, with purchases contingent on meeting price cap regulations, reportedly set below $60 per barrel. Pertamina’s refining unit spokesperson, Hermansyah Nasroen, emphasized the company’s adherence to refinery specifications and regulatory compliance in sourcing crude oil.

Western sanctions targeting the Russian energy sector, including EU embargoes on Russian oil and pricing restrictions, have redirected Russian oil exports primarily to China, India, and Turkey. In response to these sanctions, Russia has utilized what is known as a “shadow fleet” of older, largely uninsured tankers to transport oil, often surpassing the imposed price caps.