Jakarta \u2013 Conflict in the Middle East involving Iran, the United\nStates, and Israel is beginning to trigger concerns about global\neconomic stability.<\/p>\n
A surge in global crude oil prices has become the most direct\nconsequence of escalating geopolitical tensions. This situation also\ncarries the potential to place pressure on Indonesia\u2019s economy through\nenergy price channels, rupiah exchange rates, and fiscal stability.<\/p>\n
The Prasasti Center for Policy Studies views the conflict escalation\nas a risk of becoming a new source of external pressure on Indonesia\u2019s\neconomy in 2026. One major risk stems from potential disruptions at the\nStrait of Hormuz, a strategic passage through which approximately 20 to\n30 per cent of the world\u2019s oil trade flows.<\/p>\n
Policy and Programme Director at Prasasti, Piter Abdullah, stated\nthat the main impact of the conflict can be seen from the surge in\nglobal crude oil prices. Rising global energy prices also have the\npotential to disrupt international logistics supply chains.<\/p>\n
\u201cRising oil prices will cause the potential for increased domestic\nfuel prices,\u201d said Piter during an Exclusive Interview discussion on the\nImpact of Iran-US Conflict Escalation on Indonesia on Thursday (12 March\n2026).<\/p>\n
He assessed that surging oil prices have the potential to trigger\ninflation increases if domestic fuel prices rise accordingly.\nAdditionally, international trade activity is estimated to slow, which\ncould pressure government tax revenues.<\/p>\n
Another vulnerability that has emerged is the limitation of national\nstrategic energy reserves. Piter explained that Indonesia\u2019s strategic\noil reserves are estimated to be sufficient to support only\napproximately 23 to 26 days of needs.<\/p>\n
This figure falls far below the International Energy Agency standard,\nwhich recommends reserves equivalent to 90 days of net imports.<\/p>\n
\u201cWhen geopolitical conflict occurs in a region that serves as a major\nglobal energy trading route, import-dependent nations such as Indonesia\nmust be more cautious. Limited energy reserves make policy room for\nmanoeuvre narrower if global supply disruptions occur,\u201d said Piter.<\/p>\n
Rising energy import requirements can increase pressure on\nIndonesia\u2019s external balance.<\/p>\n
\u201cWhen energy prices rise and global uncertainty increases, pressure\non the rupiah exchange rate typically rises as well. This is not only\ninfluenced by domestic factors but also by the dynamics of global\ncapital movements,\u201d Piter stated.<\/p>\n
This pressure can also seep into the government\u2019s fiscal position.\nThe structure of the State Budget still remains sensitive to\nfluctuations in global oil prices.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/war-effect-fuel-price-rises-and-government-programme-efficiency-becomes-unavoidable-1773323577", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }