Oil importer Indonesia leaves OPEC membership

According to media reports, oil importer Indonesia suspended its membership from OPEC as it cannot be involved in the group’s decision to cut oil production.

OPEC reportedly proposed that Indonesia cut its oil production by 37,000 barrels a day, which is around 5% of its output. However, Indonesian Energy and Mineral Resources Minister said they can only accept an oil reduction of 5,000 bpd due to budget constraints.

Although it is not clear whether the country has left its membership itself or it has been suspended by OPEC, it is seen more likely by economists that its membership was frozen as it was the only member country to not participate in OPEC’s decision to cut oil production, the reports indicate.

The oil industry is very important for the country’s economy despite the fact that its contribution decreased to 3.4% from the 25% share in 2006.