DPR Commission VII urges government to anticipate Strait of Hormuz closure impact
Jakarta – Vice-Chairman of Indonesia’s DPR (People’s Consultative Assembly) Commission VII, Chusnunia Chalim, has urged the government to anticipate the impact of the Strait of Hormuz closure on Indonesia as a consequence of Iran’s conflict with the US and Israel.
She assessed that the closure of the Strait of Hormuz and restrictions on commercial shipping in the region could disrupt global trade routes and trigger increased logistics costs in the near term.
“The Strait of Hormuz is a strategic global trade route serving as the main gateway for oil and commodities from the Gulf region, meaning disruptions on this route will not only affect international trade,” Chusnunia stated in remarks in Jakarta on Monday.
She also noted that such developments would impact business operators, as the situation could lead to increased trading costs due to escalating conflict.
“The consequence is that Indonesia’s import and export costs could rise, especially since Indonesia still depends on crude oil imports to meet its energy requirements,” she said.
According to her assessment, the closure of the Strait of Hormuz could trigger a significant increase in global oil prices. Moreover, she noted that every US$1 increase in oil prices per barrel above government assumptions could burden the state by approximately IDR 10.3 trillion.
“Rising energy prices will increase transportation, manufacturing, and agricultural costs, which in turn will raise prices of goods and services overall,” she stated.
Additionally, she predicted that the tourism sector could suffer negative impacts, as rising airline ticket prices and accommodation costs could reduce tourists’ interest in visiting Indonesia.
She therefore cautioned that the escalation of Middle Eastern conflict and the Strait of Hormuz closure represent a serious threat to Indonesia’s business sector. Negative impacts from energy supply and logistics disruptions could spread across various economic sectors and impede overall economic growth.
However, she viewed the Strait of Hormuz closure as a potential opportunity for Indonesia to accelerate economic transformation towards a more sustainable, efficient, and self-reliant economy.
“The government needs to create policies that support and provide incentives for businesses to diversify energy sources, improve energy efficiency, and develop import-substitution industries,” she said.