Economist: Israeli Attack on Iran Could Push Oil Prices above 100 Dollars per Barrel

Jakarta – The Israeli military attack on Iran on Saturday, 28 February 2026, is assessed to have the potential to trigger a surge in global crude oil prices. Mohammad Faisal, an economist and Executive Director of CORE Indonesia, states that the escalation of the conflict could bring oil prices to their highest level in several years.

Faisal explained that global oil prices currently remain in the region of 70 dollars per barrel. However, should the conflict continue and not subside promptly, prices could rise to the level of 80 dollars per barrel.

Furthermore, he cautioned that a worst-case scenario could occur if oil distribution through the Strait of Hormuz experiences disruption. This route represents approximately 20 percent of global oil trade.

“If it reaches 100 dollars per barrel, that enters a high zone, a record. In recent years we have not experienced an increase that high; the last time was at the beginning of the Russia-Ukraine war,” Faisal said.

Potential for Wider Conflict

Faisal assessed that tensions between Iran and Israel risk developing into a broader regional conflict, particularly if the United States becomes directly involved. He also mentioned the possibility of support from China and other countries backing Iran, which could prolong the escalation.

“There is a possibility that this war will last longer than anticipated,” he stated.

Impact on Fuel Prices and Inflation

According to Faisal, a surge in global oil prices will have a direct impact on the adjustment of fuel prices domestically. Non-subsidised fuel is almost certain to increase following the mechanism of international market prices.

However, of greater concern is the potential adjustment of subsidised fuel prices such as Pertalite and Solar, which are widely used by lower and middle-income populations.

“This price increase certainly has the potential to affect inflation and reduce the purchasing power of the general population,” Faisal said.

Geopolitical Situation Heats Up

Israel and the United States have launched a series of attacks against several targets in Iran, including the capital Tehran, which reportedly caused significant damage and civilian casualties.

In response, Iran launched missile attacks against Israeli territory and American military facilities in the Middle East region.