US looks to key Asian partners as Indonesia ‘likely to reject’ calls for Russian oil price cap

Washington to approach Malaysia, Australia and Japan on supporting efforts to bring Russian oil prices down, official says

Indonesia’s foreign policy principle means it is unlikely to side with either the West or Russia, as it waits on China and India’s moves, analyst notes

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US officials have called for a potential price cap on Russian oil. Photo: Bloomberg

Published: 8:15pm, 11 Aug 2022

The United States will look to key strategic Asian partners such as Japan and India to support a price cap on Russian oil, as analysts say Indonesia is likely to reject lobbying attempts on the matter this week.

US Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg was in Jakarta on a two-day visit earlier this week to meet her counterparts from the Coordinating Ministry for Maritime and Investment Affairs, the Ministry of Finance, the Ministry of Energy and Mineral Resources, and the Financial Transaction Reports and Analysis Centre, as well as private sector leaders.

During these meetings, Rosenberg “condemned Russia’s unprovoked and unjustifiable war in Ukraine and discussed efforts to mitigate the war’s spillover effects, including through a potential price cap on Russian oil”, according to a statement by the US Department of the Treasury.

Indonesia’s Finance Minister Sri Mulyani (left) and US Treasury Secretary Janet Yellen during the G20 finance ministers and central bank governors meeting in July. Photo: EPA-EFE

Rosenberg was piggybacking on efforts by US Secretary of Treasury Janet Yellen during the G20 finance ministers and central bank governors meeting in July. Yellen had spoken to Indonesia’s finance chief Sri Mulyani and Luhut Pandjaitan, coordinating minister for maritime and investment affairs, urging them to support the price cap scheme.

At that time, Sri said Indonesia would consider the implications of the Russian oil price cap as it would “heavily affect oil-producing countries and their buyers”.

Aside from Indonesia, the US will also talk Malaysia, Australia and Japan into supporting G7’s goal to bring Russian oil prices down, a Washington official told Indonesia’s English-language newspaper The Jakarta Post.

“There are two kinds of countries that are in the G7+, countries that are exporting oil from Russia [and] those that do not export but provide financial and insurance services on oil transportation,” said the official, who spoke on condition of anonymity.

If Jakarta were to support the proposal, the official claimed the move would be “beneficial” as the government is currently paying “a lot of money in [oil] subsidies”.

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