Indonesia unexpectedly reduced natural gas exports to Singapore in late October, unsettling the relationship between the two nations. Indonesia is Singapore's largest gas supplier, and Singapore depends on imported fuel for nearly all power generation. The Indonesian government stated the move was intended to shore up domestic supply and strengthen energy security.
In late October, Indonesia announced an immediate reduction of gas exports via pipeline to Singapore by approximately 31 million standard cubic feet per day, equivalent to about 14% of Indonesia's average daily pipeline-gas exports to Singapore. The duration of the reduction remains unclear. Singapore's Prime Minister Lawrence Wong expected existing energy agreements to be honored, while gas importers are pursuing remedies under their supply contracts.
Indonesia insists the reduction is permitted under existing contracts. Singapore's Minister for Energy, Trade and Industry, Tan See Leng, assured citizens they could "keep calm and carry on," stating households and businesses can be assured energy security is a top priority. Singapore imports more than a billion cubic feet of natural gas a day, meaning the reduction amounts to about 2% of daily demand.
Electricity prices have remained broadly unchanged. Warren Patterson, head of commodities strategy for ING Groep NV in Singapore, stated the reduction should be manageable but highlighted the need to diversify energy supplies. Indonesia is grappling with a long-term decline in natural gas output as domestic demand rises, diverting gas to ensure reliable electricity generation at home.
A similar plan to reduce pipeline exports was floated in April 2025. The timing of the latest cuts has raised questions regarding worsening relations between Singapore and Indonesia over other issues, including recent investigations into fires in Indonesia causing regional smog.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing