Escalating Iran-Israel-US Conflict Threatens Global Trade, Trade Minister Warns
Jakarta, CNBC Indonesia — The escalating conflict between Iran, Israel and the United States is intensifying and raising concerns, particularly in the trade sector.
Trade Minister (Mendag) Budi Santoso hopes that the escalation of the conflict involving these three nations does not become prolonged, as it risks dragging the global trade sector, including Indonesia.
“Our hope is that it ends quickly. Right now we don’t yet know (its impact on exports and imports), but if it continues, not only Indonesia, but all countries will certainly experience those impacts,” said Budi during a meeting at his office in Jakarta on Monday (2 March 2026).
One of the largest risks being monitored by the government is the potential disruption to global energy distribution routes. The Strait of Hormuz, which serves as one of the main global crude oil shipping routes, is considered extremely crucial. If access in that region is disrupted or even closed, the impact could be immediately felt in global oil prices.
Budi explained that rising energy prices could trigger increased production costs across sectors. Manufacturing industry, export activities, and prices of goods in the domestic market could all be driven upwards. Increased logistics and raw material costs also risk eroding the competitiveness of Indonesian products in international markets.
He noted that fuel is one of the components most vulnerable to being affected should the escalating conflict situation worsen.
“For example, fuel will definitely increase. If it really happens, we hope it won’t. If it really does happen, it will impact our industry and our exports, not only in Indonesia, but to all sectors,” he explained.
No Direct Impact Yet
Despite acknowledging that the potential risks are quite significant, Budi emphasised that Indonesian trade activities are currently running normally. Exports to the Middle East region have also shown no significant disruption.
He reminded that previously, tensions between Iran and Israel also occurred, but did not have direct impacts on Indonesian trade.
“There was tension before between Iran and Israel, but we hope it ends quickly and doesn’t continue. And when it did happen before, it actually didn’t impact us. We hope this ends even more quickly,” said Budi.
The government, he continued, is continuously monitoring developments in the global situation. Stability in the Middle East region is considered one of the important factors for stable energy prices and smooth flow of global trade.
If the conflict can be quickly contained, Indonesia is expected to avoid additional pressure amid the still-challenging dynamics of the global economy.