JAKARTA \u2013 The escalation of conflict between Iran and Israel\nthreatens to shake global energy markets. Global crude oil prices,\npreviously hovering around $67 USD per barrel, have now breached the $80\nUSD per barrel level.<\/p>\n
Should the conflict expand and the Strait of Hormuz remain closed,\ncrude oil prices could potentially surge to $100 USD per barrel or\nhigher. As a consequence, Indonesia, which imports substantial\nquantities of fuel, must prepare for fiscal pressure and the potential\nfor increased fuel prices.<\/p>\n
Energy observer and economist from Gadjah Mada University (UGM),\nFahmy Radhi, stated that the spike in oil prices has already occurred\nsince the initial attack in the Middle Eastern conflict. If war\nescalation extends further, the situation worsens, and global crude oil\nprices could potentially rise to the $100 per barrel level.<\/p>\n
\u201cClearly, the initial attack has already raised oil prices\u2014global\ncrude moved to $67 USD and now has breached approximately $80 USD. And\nif the war escalation expands, it will certainly trigger even higher\nincreases, indeed there is potential for prices to reach $100 USD per\nbarrel; that is possible,\u201d Fahmy stated when contacted by Kompas.com on\nSunday, 1 March 2026.<\/p>\n
Iran is the fourth largest crude oil producer within the Organisation\nof the Petroleum Exporting Countries (OPEC), with production exceeding 3\nmillion barrels daily as of January 2026.<\/p>\n
This Islamic Republic also possesses a coastline directly bordering\nthe Strait of Hormuz, the most vital maritime route for global crude oil\ntrade.<\/p>\n
Beyond the price surge, Iran\u2019s closure of the Strait of Hormuz is\nviewed as a serious threat to global supply chains. This strait\nrepresents a vital route for transporting crude oil, gas, and various\nglobal commodities. Disruptions in this corridor would not only affect\nthe Middle East region but would also have broad implications for other\nnations, including Indonesia.<\/p>\n
Fahmy explained that Indonesia still relies on crude oil imports of\napproximately 1.2 million barrels daily. As a net fuel importer,\nincreases in global oil prices automatically expand the burden on the\nState Budget (APBN), particularly for energy subsidies.<\/p>\n
\u201cIf it reaches $80 per barrel, Indonesia, as a net fuel importer,\nespecially with large quantities of fuel\u20141.2 million barrels daily\u2014this\nwill swell the APBN. Especially for subsidies; the subsidy burden will\nbecome heavier,\u201d he stated.<\/p>\n
However, regarding subsidised fuel such as Pertalite and diesel,\ndecisions to raise prices become highly sensitive.<\/p>\n
According to him, if subsidised fuel prices are not increased, the\nsubsidy burden will expand and strain state finances. Conversely, if\nprices are raised, the impact could trigger inflation, reduce consumer\npurchasing power, and impede economic growth.<\/p>\n
\u201cSuch a scenario places Indonesia in a difficult position,\u201d Fahmy\nexplained.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/energy-observer-prepare-for-fuel-price-hikes-as-israel-iran-conflict-escalates-1772366067", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }