Indonesia has long experienced anxiety whenever geopolitical tensions\nflare in the Middle East. For decades, the nation\u2019s heavy reliance on\noil supplies transiting through the Strait of Hormuz\u2014the world\u2019s most\nprecarious energy chokepoint\u2014meant that any disruption triggered\nimmediate concerns: petrol queues at service stations, stock shortages,\nand government announcements of fuel price increases.<\/p>\n
The picture at the beginning of 2026, however, presents a starkly\ndifferent scenario. The world is currently anxious because the Strait of\nHormuz has been completely closed owing to the Iran-Israel conflict and\nAmerican involvement. By conventional logic, global crude oil supplies\nshould be disrupted and Indonesia should face an energy emergency.<\/p>\n
In reality? Fuel supplies throughout the country remain flowing\nsmoothly, with no shortage issues apparent, no snaking queues at service\nstations, industrial machinery continuing to operate, and no public\npanic. Why is the Middle Eastern \u201ccurse\u201d no longer affecting us? The\nanswer lies in the geopolitical move made by President Prabowo Subianto\nthrough the Agreement on Reciprocal Trade (ART) with the United\nStates.<\/p>\n
The Washington accord<\/p>\n
Retracing events to February 2026, when many observers questioned the\nurgency of President Prabowo\u2019s sudden visit to Washington DC to meet\nDonald Trump: a major agreement was signed there. Indonesia committed to\nredirecting annual energy expenditure worth US$15 billion towards the\nUnited States. This step was not merely a routine commercial\ntransaction, but rather a precisely calibrated risk mitigation\nstrategy.<\/p>\n
Our historical dependence on the Strait of Hormuz represented a\ncritical vulnerability. When that passage closed, tankers carrying Saudi\nArabian oil destined for our refineries became trapped. By shifting to\npurchasing crude oil and liquefied petroleum gas from the United States,\nIndonesia automatically redirected its vital supply route from the\nturbulent Indian Ocean to the relatively calmer Pacific Ocean.<\/p>\n
Oil from Texas or Louisiana now flows directly to the Balikpapan and\nCilacap refineries without needing to traverse the geopolitically\nsensitive Middle Eastern chokepoint. This explains why, even with Hormuz\nclosed today, our fuel stocks remain secure. The supply exists, routes\nare open, and ships continue sailing.<\/p>\n
Economic logic: countering dollar pressure<\/p>\n
The larger question arises: won\u2019t purchasing oil from the US in\ndollars\u2014when exchange rates are high\u2014drain the state budget? This is\nwhere the ART scheme\u2019s ingenuity operates. The agreement is reciprocal\nin nature.<\/p>\n
The cause-and-effect logic is straightforward: Indonesia agrees to\nbecome a loyal buyer of American energy, but in return, America offers\nzero-percent tariffs for Indonesia\u2019s flagship products such as palm oil,\ntextiles, and processed nickel. This constitutes \u201cmodern barter\u201d. Our\nexport value to America surges dramatically as our textiles and footwear\nbecome 10-15 per cent cheaper than competitors in the American\nmarket.<\/p>\n
Benefits from this massive export serve as a \u201ccushion\u201d for the state\nbudget. Although we expend dollars to purchase oil, we receive\nsubstantially larger dollar inflows from finished goods exports. The\nresult is a trade surplus equilibrium. Pressure on the rupiah is\nsuccessfully mitigated because market demand for Indonesian products\nincreases. Rather than squandering state budget funds merely subsidising\nskyrocketing prices caused by shortages, the government now utilises the\ntrade surplus to maintain domestic energy price stability.<\/p>\n
Efficiency amid crisis<\/p>\n
This mitigation is further reinforced through strengthened logistics\ncapacity via Pertamina International Shipping (PIS). Operating\nindependently owned Very Large Crude Carrier (VLCC) tankers enables\nmassive oil transportation from the US in single voyages. Although\ndistances are greater, with carrying capacity reaching 2 million barrels\nper trip and without expensive war risk insurance costs (by avoiding\nconflict zones), the per-barrel logistics cost becomes highly\ncompetitive.<\/p>\n
We are witnessing a paradigm shift. Whereas Indonesia previously\noccupied a defensive and reactive position regarding global crises, the\ngovernment now operates tactically. Energy source diversification\nextends from the Middle East to the United States and Africa. This does\nnot mean abandoning Middle Eastern producers; rather, we cannot stake\nthe fate of 280 million citizens on a single narrow strait carrying\nextreme risks.<\/p>\n
The urgency behind normalcy<\/p>\n
The success of this mitigation scheme offers us a valuable lesson:\npolicies appearing \u201croutine\u201d or merely ceremonial during peacetime\nfrequently become lifesavers during crisis. When the ART agreement was\nsigned last February, perhaps few recognised it as the foundation of our\nenergy resilience.<\/p>\n
Today, as the Strait of Hormuz closes and the world braces with\nanxiety, Indonesians can still start their vehicles to earn their\nlivelihoods without fearing shortages. The smooth supply we experience\ntoday represents tangible proof that long-term strategy and courageous\ngeopolitical decision-making constitute essential requirements for\nnational sovereignty. What appears normal today is actually the result\nof yesterday\u2019s diplomatic and negotiating efforts.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/strait-of-hormuz-closure-prabowos-energy-strategy-proceeds-smoothly-1773143617", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }