Global crude oil surge, Indonesian composite index predicted to weaken today
Jakarta — Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo Sekuritas, projects the Indonesian Composite Index (IHSG) to trade lower on Monday, 9 March, amid surging global crude oil prices that have breached the USD 100 per barrel mark.
“Based on technical analysis, we anticipate the IHSG could weaken within a limited range, with support and resistance levels at 7,460-7,860,” Nico stated in his analysis in Jakarta on Monday.
The primary catalyst is the sharp escalation in crude oil prices triggered by escalating Middle East tensions. US and Israeli forces have reportedly targeted military facilities and attacked Iranian energy infrastructure, including oil storage depots and related facilities near Tehran and Alborz Province, causing major fires. In retaliation, Iran has launched ballistic missiles and drone attacks against Israeli and American military assets, including bases across the Middle East.
As of 07:50 WIB this morning, WTI crude oil reached USD 109.82 per barrel, whilst Brent oil touched USD 109.53 per barrel.
“We assess that escalating attacks on Iranian energy facilities could drive further global oil price increases due to heightened supply disruption risks, particularly if the conflict affects shipping lanes through the Strait of Hormuz, which channels approximately one-fifth of global oil trade,” Nico explained.
The ongoing conflict has intensified concerns over global oil trade disruptions, as the Middle East and Strait of Hormuz remain critical energy distribution routes.
Domestically, the Indonesian government is considering budget adjustment options for the Free Nutritious Meals Programme (MBG) or raising subsidised fuel prices should global oil price surges strain the 2026 state budget. Without policy adjustments, the state budget deficit could widen to 3.6 per cent of GDP.
Spending efficiency measures and infrastructure project deferrals could help maintain fiscal discipline and prevent deficit expansion. However, such measures risk slowing development project realisation and activity in the construction sector.
“If the government ultimately raises subsidised fuel prices, the impact could trigger inflation increases, raise transportation and logistics costs, and suppress consumer purchasing power,” Nico cautioned.
On Friday, 6 March, US stock markets declined across the board: the Dow Jones Industrial Average fell 0.95 per cent to 47,501.55, the S&P 500 weakened 1.33 per cent to 6,740.02, and the Nasdaq Composite dropped 1.59 per cent to 22,387.68.
Meanwhile, the IHSG closed Friday, 6 March, 124.85 points lower, or 1.62 per cent down, at 7,585.68. The blue-chip LQ45 index declined 11.77 points, or 1.49 per cent, to 776.04.