Indonesian Exporters Brief Trade Minister on Impact of US-Israel Versus Iran Conflict

Jakarta — Trade Minister Budi Santoso has disclosed the outcome of his meeting with Indonesian exporters regarding the potential impact of escalating conflict between the United States, Israel, and Iran on Indonesia’s export performance, particularly to the Middle East region.

Budi stated that the government had convened with business players to hear directly from those on the ground. From these discussions, exporters acknowledged that the Middle Eastern conflict does have an influence, especially on cargo shipments.

“We’ve met with them. They conveyed that there is indeed some impact, particularly for shipments to the Middle East. However, demand from the Middle East has not actually declined,” Budi said when met at the Office of the Coordinating Ministry for Food Affairs in Jakarta on Friday, 13 March 2026.

According to him, the most keenly felt impact at present is not on commodity demand, but rather on increased shipping costs resulting from the heating geopolitical situation in the region.

“Yes, all commodities we export there. What has risen is the transportation cost. That’s the challenge. So that’s the problem,” he said.

Nevertheless, Budi emphasised that exporters continue to maintain their export activities to the Middle East region. Demand from countries in the area was described as remaining stable.

“But they continue to export. Only the demand from the Middle East has not actually changed. But the challenge is indeed a slight increase in logistics costs. Hopefully,” he said.

Previously, Budi stated that the government would call in exporters, particularly palm oil exporters, to discuss the potential impact of the Middle East conflict on Indonesian trade. This step was taken because the conflict could disrupt international shipping routes that serve as the main export channels, including for crude palm oil (CPO) exports.

“Tomorrow, yes, tomorrow I will meet with the exporters, but we also haven’t been able to calculate yet. Yesterday we reviewed it with the Trade Policy Agency, but we also cannot confirm until we receive input from business players as well, because hopefully our hope is that the war ends quickly,” Budi said when met at the Trade Ministry office in Jakarta on Thursday, 5 May 2026.

He added that the government is also preparing contingency measures should the conflict prolong and disrupt Indonesia’s palm oil exports. “Because if that does get disrupted, then we would need to find alternative markets. That is also something I will discuss with the exporters tomorrow,” he said.