Indonesia will keep buying cheap Russian oil, and Washington just raised the price of that

Last Friday, US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. The law allows tariffs of up to 100 per cent on the five biggest buyers of Russian crude oil, gas and military equipment, and on any country that helps Moscow work around sanctions. The South China Morning Post reports that Jakarta intends to keep importing discounted Russian crude, to secure energy supplies at home and to take some pressure off the state budget.

The discount is the whole point. Western governments have tried to limit what Russia earns from each barrel, including through the G7 price cap, a ceiling on the price buyers are allowed to pay for Russian crude. With fewer customers willing to deal openly, Russia sells cheaply to those who will. The new law also goes after the shadow fleet, the old or oddly owned tankers that move Russian oil under flags of convenience so the cargo is hard to trace and the price cap is hard to enforce. Cheap oil moving that way is what the new law says it will chase.

Analysts quoted by the paper say this is the right choice for Indonesia's energy security, while urging the government to keep talking to Washington so there are no surprises. The gamble is narrow and measurable: the penalty falls on the top five buyers, so the question is not whether Indonesia buys Russian oil, but whether it ends up buying enough to join that list.

Why it matters

Cheaper crude flows into the fuel subsidy bill, which is money that would otherwise come out of other budgets, so this is not only a foreign policy choice. If the tariff lands, it lands on exporters who never touched a barrel of Russian oil, on top of the US tariffs Indonesian goods already pay. Watch the tone of talks between Jakarta and Washington in the next few weeks, because a quiet arrangement there is what keeps the savings and avoids the bill.