Saudi Arabia and Indonesia Strengthen Trade Ties with US$27 Billion in New Agreements

Indonesia and Saudi Arabia signed US$27 billion in deals. This builds on bilateral trade that hit US$6.5 billion in 2024 and advances cooperation aligned with Vision 2030 and Golden Indonesia 2045.

The state visit of Indonesian President Prabowo Subianto to Saudi Arabia has yielded a series of agreements and memorandums of understanding (MoUs) valued at US$27 billion. Signed during the visit, the deals span clean energy, petrochemicals, mining, logistics, aviation fuel services, and digital innovation, among other sectors.

The push to elevate bilateral economic relations aligns with both Saudi Arabia’s Vision 2030 and Indonesia’s Golden Indonesia 2045 development agenda.

A trade relationship built on energy

Trade between Saudi Arabia and Indonesia has reached a cumulative value of more than US$31 billion over the past five years, with energy dominating the exchange. Saudi exports to Indonesia stood at approximately US$4.1 billion in 2023, led by crude petroleum (US$2.32 billion) and refined petroleum (US$844 million). Imports from Indonesia into the Kingdom reached nearly US$2.99 billion in the same year, largely driven by car exports (US$851 million), palm oil (US$578 million), and processed fish.

Top 5 imports into Saudi Arabia from Indonesia:

Top 5 exports from Saudi Arabia to Indonesia:

Saudi Aramco remains a dominant player in Indonesia’s energy market, supplying 25 to 30 percent of its gasoline needs and exporting an average of 11 million barrels of oil annually. This foundational energy relationship is now being expanded through joint ventures in refining, petrochemical innovation, and environmental technology.

During the visit, both governments discussed the need to stabilize energy supply chains, enhance cooperation in electricity and energy storage projects, and develop renewable energy sources such as green hydrogen.

Saudi utility giant ACWA Power signed preliminary agreements with Indonesia’s sovereign wealth fund Danantara and state energy firm Pertamina to explore renewable energy investments. These ventures could unlock project funding of up to US$10 billion, boosting both the governments’ ambitions in solar, wind, and clean hydrogen.

Investment momentum tied to structural reform goals

The new agreements are supposed to be more than symbolic. As per Saudi Press Agency (SPA), they aim to create a shared investment ecosystem, with Saudi and Indonesian officials committing to improving the regulatory environment, removing investment barriers, and aligning their development policies. They intend to focus on financial services, logistics, manufacturing, tourism, agriculture, and green technology.

Both governments have pledged to foster an enabling climate for private sector collaboration by simplifying licensing procedures, giving fiscal support, and improving information exchange. They also intend to put a concerted effort into supporting technology transfer across industries, from smart grids to artificial intelligence (AI) in energy management, as per SPA.

Mining and minerals emerge as a major focus

Another cornerstone of the agreements is the shared intent to ramp up cooperation in mineral resources. Saudi Arabia has raised its estimated value of untapped mineral wealth to US$2.5 trillion after the discovery of rare earth elements and critical metals. At the same time, it is actively seeking partners to co-develop new mining projects, with US$100 billion in estimated investment planned, US$20 billion of which has already been committed.

Indonesia’s mineral sector can offer synergies. Both countries plan to collaborate on ore exploration, processing, geological studies, and adoption of modern mining technologies, as per SPA. They have placed knowledge-sharing in sustainable extraction methods and regulatory coordination high on the agenda.

Gearing up for broader GCC-Indonesia trade pact

Beyond bilateral deals, the Saudi-Indonesian partnership is embedded in a wider ambition to deepen trade ties between Indonesia and the six-member Gulf Cooperation Council (GCC). Negotiations on a free trade agreement between Indonesia and the GCC are said to be progressing well, with both sides expressing optimism about finalizing a deal in the near future.

Indonesia’s successful Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE), which came into force in August 2023, could serve as a model for such an accord. The CEPA has already led to tariff eliminations on a wide range of products and aims to double bilateral trade to over US$10 billion in five years.

A similar deal with the broader GCC could accelerate trade in goods and services between Indonesia and the Gulf. For Saudi Arabia, this would enhance its strategic footprint in Southeast Asia. For Indonesia, it would mean increased access to capital, energy security, and diversified export markets.

Read more: EU and UAE CEPA Negotiations: Gateway to Deeper Gulf-Europe Integration

Collaborating on digital innovation and green transformation

The scope of collaboration is not limited to traditional sectors. Both the governments discussions also touched on strengthening digital infrastructure, judicial cooperation, education, sports, tourism, and workforce mobility.

As reported by SPA, both countries expressed commitment to environmentally sustainable energy transitions, including through capacity-building initiatives and knowledge-sharing workshops.

In line with international climate policy, the two nations plan to jointly explore carbon capture, utilization, and storage (CCUS) technologies and establish cross-border frameworks for carbon transport. This opens new space for private and public investments into emerging green sectors.

Outlook for future: From transactional to strategic

Saudi Arabia’s growing economic footprint in Indonesia, currently at US$669 million spread across 113 projects, means the Kingdom has a long-term interest that extends well beyond oil exports.

With trade reaching US$6.5 billion in 2024 alone, Saudi Arabia remains Indonesia’s largest trading partner in the Middle East. If the commitments made during President Subianto’s visit translate into execution, both economies and investors stand to gain from supply chain integration, public investments, and modernization.

Read more: Saudi Arabia’s ICT Hits US$10 Billion: Trends and Implications

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