Indonesia suspends cartel membership to avoid cuts
Indonesia has suspended its membership of the Organization of Petroleum Exporting Countries, less than a year after rejoining the cartel, as the net oil importer said it could not agree to the group’s production cuts. The decision came as the cartel agreed its first oil output cut since 2008 in a bid to tackle overcapacity and prop up prices. The suspension could be a setback for Indonesia, Opec’s only East Asian member, which had hoped to benefit from being closer to Opec countries when it reactivated its membership at the start of the year. Opec had proposed Indonesia cut oil production by about 37, 000 barrels per day, or about 5% of its output, which would dent the already slipping oil rent in Southeast Asia’s largest economy. Indonesia Energy and Mineral Resources Minister Ignasius Jonan, who attended the Vienna meeting, said the only reduction Indonesia could accept was a cut of 5, 000 bpd, which had been approved in the country’s 2017 budget.
