Indonesia and Thailand target $1 billion trade as Prabowo tightens Southeast Asian energy ties
Jakarta and Bangkok push bilateral trade toward $1 billion while Indonesia locks in Russian crude supply and regional power demand triples.
Ministers from Indonesia and Thailand met on Tuesday (2026-09-01) to discuss doubling bilateral trade to $1 billion, a target that would require a sharp acceleration from the $591 million recorded in 2025, a level well below pre-pandemic peaks. The talks come as Indonesian President Prabowo Subianto pursues energy and trade deals across Southeast Asia and beyond, seeking to lock in supply and financing at preferential terms.6
The trade figure matters because it is tiny relative to the region's energy ambitions. Jakarta is simultaneously negotiating Russian crude supply, cross-border power sales to Singapore, and refinery projects that have been stalled for a decade. Thailand, for its part, sits at the centre of ASEAN grid discussions but has seen renewable project cancellations run at 50-60% over the past five years, according to Bain & Company and Standard Chartered research.4,2
On the oil side, Prabowo's Moscow visit in mid-April appears to have yielded more than diplomatic gestures. Russia reportedly committed to supplying Indonesia with 100 million barrels of oil, potentially including both crude and refined fuels, at preferential prices, with a further 50 million barrels available if required. Indonesian refineries are engineered for lighter, sweeter grades, and the Russian barrels at around 40 degrees API and 0.2% sulphur fit that configuration well.4
The supply deal could breathe new life into the proposed 300,000 b/d Tuban refinery project, a joint venture between Rosneft and Pertamina that has been stalled since 2016. The $24 billion project has not begun full construction, with Rosneft's final investment decision still pending, but guaranteed feedstock at preferential prices removes one of the principal objections to sanctioning the build.4
Russian crude logistics favour Indonesian buyers. Kozmino's roughly 1 million b/d loading capacity currently sends most cargoes to China, and any redistribution toward Southeast Asian buyers would tighten the spot market and support higher differentials for Pacific Basin grades. The Philippines began importing Russian crude under a US waiver in March 2026, after state oil company Petron agreed to purchase 2.5 million barrels, establishing a precedent for regional buyers following the same path.4
The trade push with Thailand coincides with a broader regional electricity build-out. Power demand from data centres, electric vehicles and green industrial parks across Southeast Asia is expected to rise more than 100 terawatt-hours over the next three to four years, according to the 2026 Southeast Asia Green Economy Report. Meeting that surge requires more than $200 billion in investment, with over half flowing to data centres as operators seek faster grid access and aim to avoid connection delays.1,2
Singapore and Indonesia are already moving on cross-border electricity trade, with Danantara, Keppel and Sembcorp signing MOUs to explore low-carbon power offtake toward a 3.4 gigawatt goal. The Asian Development Bank's $70 billion energy and digital infrastructure program, which includes a pan-Asia power grid initiative connecting national and subnational systems, puts Southeast Asia at the centre of its lending pipeline.5,3
The gap between announced ambition and delivered projects remains wide. Only around 60% of the $540 billion in announced green investments across power and electric vehicle supply chains is likely to proceed under current conditions, the Bain report found. Grid connection delays, permitting issues and regulatory uncertainty have cancelled half to two-thirds of renewable projects in Vietnam, Thailand and Indonesia over the past five years.2
Annual grid investment shortfalls are estimated at $18 billion by 2035, meaning power demand growth will outpace infrastructure regardless of trade agreements or refinery deals. For Indonesia and Thailand, the $1 billion trade target is a rounding error against the capital required to keep lights on and factories running.2
The near-term test is whether preferential Russian crude actually flows at scale. If the Tuban project reaches FID and Kozmino redirects cargoes, Indonesia becomes a structural buyer of discounted barrels, potentially pressuring Dubai and Urals differentials. If the deal stays on paper, prosecutors and analysts will treat the Moscow commitments as another round of diplomatic theatre with little market consequence.4
Watch the Tuban FID calendar and Pertamina's tenders for medium sour crude over the next two quarters. Those will show whether the preferential-price promise survives contact with shipping schedules and payment mechanics.4