Jakarta \u2014 Iran\u2019s decision to close the Strait of Hormuz is expected\nto have serious implications for both the global and domestic\neconomy.<\/p>\n
The policy was adopted in response to the death of Iran\u2019s Supreme\nLeader, Ayatollah Ali Khamenei, in an escalation of conflict involving\nthe United States and Israel in recent days.<\/p>\n
Bhima Yudhistira, Executive Director of the Center of Economic and\nLaw Studies (CELIOS), projects that global crude oil prices could reach\nUSD 100 to USD 120 per barrel. Currently, oil prices have already risen\napproximately 13.4% in the past month, and the rally is expected to\ncontinue.<\/p>\n
\u201cThe disruption of the Strait of Hormuz will impact 20% of global oil\nsupply,\u201d Bhima told CNBC Indonesia on Monday (2 March 2026).<\/p>\n
According to Bhima, the situation is worsened by heightened security\nrisks in the conflict zone, including rejection of insurance\napplications for logistics vessels transiting the area. This could\nimpede distribution and complicate oil imports for many countries,\nincluding Indonesia.<\/p>\n
As a net oil importer, Indonesia will face significant fiscal\nconsequences. Under the 2026 state budget simulation, each USD 1\nincrease in oil prices above budget assumptions can add approximately\nRp10.3 trillion to government expenditure.<\/p>\n
If oil reaches USD 100 to USD 120 per barrel, then government\nspending could increase by up to Rp515 trillion in 2026. This includes\nnot only fuel subsidies but also compensation to Pertamina and\nelectricity subsidies.<\/p>\n
\u201cThere is a direct double burden to the state budget. The situation\nis worsened by concerns over flight to quality from investors, causing\nrupiah depreciation,\u201d Bhima said.<\/p>\n
Furthermore, he noted that the food sector is vulnerable to impacts,\nparticularly those sensitive to currency fluctuations and import supply\nchain disruptions, such as soybean, wheat, and meat. Imported inflation\nfrom oil and food will create a downward spiral in consumer purchasing\npower.<\/p>\n
\u201cThe public is clearly unprepared for excessive increases in fuel\nprices and volatile food inflation. If the conflict continues and\nexpands, many developing countries could face economic crisis,\u201d he\nsaid.<\/p>\n
Separately, oil and gas practitioner Hadi Ismoyo views the latest\nMiddle East conflict as far more serious than previous tensions. In his\nview, the death of Supreme Leader Ayatollah Ali Khamenei marks a turning\npoint in escalating conflict, including the closure of the Strait of\nHormuz.<\/p>\n
\u201cThis means 20% of global oil supply will be lost, and 30% of global\nLNG supply will disappear from the market. Prices of oil and LNG\ncommodities will rise significantly,\u201d he said.<\/p>\n
He projects conditions will worsen going forward. Given that Imam\nKhamenei was not only the Supreme Leader determining strategic policy\nbut also the Supreme Leader among Shia clerics deeply revered by his\nfollowers.<\/p>\n
\u201cThis will awaken deep-seated grievances like the death of Imam\nHussein at the Plains of Karbala, with the US and Israel responsible for\nhis cruel killing,\u201d he said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/strait-of-hormuz-closure-experts-predict-oil-prices-will-soar-1772431209", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }