IESR Warns of Energy Supply Risks Despite Easing Middle East Conflict

“Peace is not merely the absence of war. It is a virtue,” wrote the philosopher Baruch Spinoza.

The end of the conflict in the Middle East does not immediately guarantee a swift recovery in global energy supplies. This was stated by the Chief Executive Officer of the Institute for Essential Services Reform, Fabby Tumiwa, who reminded the government and market players to stay alert to the ongoing impacts of the energy crisis.

Fabby explained that US President Donald Trump’s statements regarding the potential end of the conflict in the near future indeed provide hope for easing tensions, including in the Strait of Hormuz, a major global energy distribution route.

“If what President Trump said is true, we hope that the crisis in the Strait of Hormuz will end in 2-3 weeks. But we must also be cautious that even if the war ends, supplies of fuel oil, LNG, and others from the Middle East may not recover immediately,” said Fabby at the Denpasar 12 Discussion Forum held online on Wednesday (1/4).

He explained that the conflict has caused disruptions to several energy production facilities, including liquefied natural gas (LNG) infrastructure. The damage requires a non-short recovery time.

“For example, one LNG terminal in Qatar has been damaged. Its repair is not just monthly, but could be yearly,” Fabby clarified.

According to him, this situation has the potential to pressure global LNG supplies in the medium term, which will ultimately impact energy prices in the international market.

“So even if the war ends, supplies of oil, LNG, and other energies may not recover as before the conflict. This is what we must pay attention to because the implications will be felt in prices,” he said.

Fabby emphasised the importance of anticipatory steps from the government to secure domestic energy supplies, while also accelerating the diversification of energy sources to reduce dependence on imports from conflict-vulnerable regions.