Indonesia unexpectedly unsettled its relationship with neighboring Singapore after it announced in late October that it would reduce natural gas exports to the city-state.

By Yongchang Chin and Chandra Asmara Indonesia is Singapore’s largest supplier of gas. Singapore depends on the imported fuel — delivered by pipeline and by ship from further afield as liquefied natural gas — for nearly all of its power generation.

Indonesian President Prabowo Subianto’s government said the move was intended to shore up domestic supply and strengthen energy security, although the decision coincided with other tensions between the two nations coming to the fore. Here’s what to know. What happened?

In late October, Indonesia announced it would immediately reduce the gas it exports via pipeline to Singapore by around 31 million standard cubic feet per day. That’s equivalent to about 14% of Indonesia’s averagedaily pipeline-gas exports sent to Singapore in 2025, according to Bloomberg calculations based on Indonesian government data. It’s unclear how long the reduction will remain in place.

Singapore buys piped natural gas — used primarily for electricity generation — under long-term contracts that allow some flexibility in how much it takes. Amid high international gas prices and shipping costs, the country has been taking the maximum volumes available under those deals, allowing it to lean more heavily on nearby suppliers rather than costlier gas from further afield.

Singapore’s Prime Minister Lawrence Wong said a day after the curbs were announced that he expected existing energy agreements to be honored. Singapore’s gas importers are also pursuing remedies available under their supply contracts, according to the Energy Market Authority. Indonesia insists the reduction is permitted under the existing contracts. Is this move by Indonesia a problem for Singapore?

Singapore’s Minister for Energy, Trade and Industry, Tan See Leng, told Singaporeans they could “keep calm and carry on.”“Our households and our businesses can be assured that our energy security is always at the top of our minds,” he said on Oct. 26.

Singapore imports more than a billion cubic feet of natural gas a day, meaning the reduction from Indonesia amounts to about 2% of its daily gas demand. Electricity prices have remained broadly unchanged since the cuts were announced.

The reduction should be manageable, although much depends on how long it lasts, according to Warren Patterson, head of commodities strategy for ING Groep NV in Singapore.“More broadly this is a good reminder, particularly in the current geopolitical environment, for the need to diversify energy supplies, something that Singapore has already been doing well over the years,” Patterson said.

Singapore has already weathered disruptions to its gas supplies this year. The US-Israel war against Iran and the effective closure of the Strait of Hormuz have disrupted some liquefied natural gas exports from Qatar, one of the world’s largest exporters and a supplier to Singapore. Singapore has been able to find replacement supplies, including from the US. More broadly, it sources LNG from suppliers in the US, Africa, the Middle East and Australia. Why is Indonesia reducing its gas exports to Singapore?

The official explanation is energy security. Djoko Siswanto, head of Indonesia’s upstream oil and gas regulator SKK Migas, said the gas was being diverted to ensure reliable electricity generation at home. Indonesia is grapplingwith a long-term decline in natural gas outputas domestic demand rises, increasing pressure on available supplies. A similar plan to reduce pipeline exports to Singapore was floated in April 2025.

Still, the timing of the latest cuts has raised questions about whether worsening relations between Singapore and Indonesia over two other issues played a role. Singapore has recently begun investigating fires in Indonesia that covered the city in smog and has set its sights on more than a dozen Indonesian and Singapore firms it suspects may be linked to the blazes. Without naming Singapore, Indonesian officials have pushed back against what they see as attempts by other countries to blame Indonesia for the haze.

The rhetoric escalated in the days before Indonesia announced the gas cuts. Prabowo accused “certain countries” of having “insulted” Indonesia over the smog issue, while Energy Minister Bahlil Lahadalia made cryptic comments about cutting energy exports to countries that didn’t show Indonesia respect. He later denied that the gas cuts were related to any conflict with Singapore.

Another possible source of friction is a recent warning from index provider MSCI Inc. that it might reclassify Indonesia as a standalone market, a move that could remove the country’s stocks from major global indexes and trigger large foreign capital outflows. The issue drew Singapore into the debate after former Indonesian trade minister Muhammad Lutfi accused the city-state’s investment funds, GIC Pte and Temasek Holdings Pte, of trying to sway the index provider’s decision. Both have denied the allegation. Can Singapore adapt to less Indonesian gas?

As Indonesia sends less gas to Singapore, the city-state may need to source more LNG from elsewhere to make up the shortfall. It has already been able to secure additional LNG from the US this year and is likely to be able to do so further, although replacement supplies could be costly at current prices.

Over the longer term, Singapore is expanding its infrastructure so it can import greater volumes of LNG. Its existing terminal places a limit on how much LNG can be received and stored at any one time. A second import terminal, due to be ready before 2030, is expected to increase Singapore’s LNGimport and processing capacity by another 50%.

Separately, Singapore is also expanding its ability to generate electricity as demand rises. Ithas announced plans to build five new power plants that will come online between 2026 and 2031, which will increase generation capacity by more than a quarter. Will this hurt relations between Indonesia and Singapore?

The flareup in tensions will not necessarily translate into lasting damage. The two countries remain close. They enjoy longstanding diplomatic ties, are both founding members of the Association of Southeast Asian Nations and maintain regular high-level political exchanges.

Singapore is also a major source of and conduit for foreign investment into Indonesia, with capital routed through the financial hub into Indonesian businesses across infrastructure, real estate and other industries. Earlier this year, Indonesia assigned its sovereign wealth fund Danantara to develop a cross-border power grid with Singapore.

But the relationship has also weathered periodic bouts of friction. Tensions stretch back to Indonesia’s Konfrontasi campaign against the formation of Malaysia in the 1960s, which included attacks in Singapore. The neighbors have since had disputes over issues including maritime boundaries and Indonesia’s restrictions on sand exports used for Singapore’s land reclamation. Another longstanding source of tension has been the large amounts of Indonesian wealth held in Singapore, which has prompted Jakarta to repeatedly try to repatriate billions of dollars through tax amnesties and other measures.