Iran-Israel-US Conflict Escalates: What Are the Major Implications for Indonesia?
The geopolitical tension between Iran, Israel, and the United States will have substantial implications for Indonesia. Probo Darono Yakti, a lecturer in international relations at Airlangga University’s Faculty of Social and Political Sciences, warns that this situation presents particular challenges for the nation.
“As an energy-importing country, Indonesia is vulnerable to rising oil prices and disruptions to global supplies. When energy corridors are disrupted, the impact extends beyond crude oil to include liquefied petroleum gas, fuel oil, and other industrial raw materials,” Yakti said in Surabaya on Friday, 13 March.
According to him, such geopolitical conflicts also trigger shifts in global financial markets. Investors tend to relocate capital towards safer assets, while rising energy prices can trigger import inflation and increase investment uncertainty.
In the medium term, the conflict may alter the landscape of global energy cooperation. Large consuming nations are likely to accelerate energy source diversification and strengthen long-term contracts with alternative suppliers.
Developing nations are most vulnerable due to limited fiscal space and high energy dependence. Consequently, Indonesia must strengthen its energy diversification strategy, maintain domestic economic stability, and accelerate energy transition.
“Energy security, maritime security, and global economic stability are now interconnected. Therefore, responses to such conflicts must be viewed not only from military or diplomatic perspectives, but also through a geoeconomic lens,” Yakti stated.
He emphasised that the conflict involving Iran cannot be understood merely as a military clash. From an international economic perspective, it also reflects competition for control over strategically important spaces in the global economy relating to energy, shipping routes, and world supply chain security.
Yakti explained that Iran’s position in the Gulf region makes it an important actor in the global economic system. The region is directly linked to world energy distribution and international trade routes. “Every escalation of conflict in Iran almost always has implications for global political economy. States capable of securing energy supplies and controlling logistics routes will possess greater economic leverage,” he explained.
One key strategic point in this conflict is the Strait of Hormuz. The passage is a vital route for global energy trade. In 2024, approximately 20 million barrels of oil per day—equivalent to roughly 20 per cent of global oil consumption—pass through the strait. Additionally, nearly one-fifth of global liquefied natural gas trade also flows through this same route.
“Therefore, the Iran conflict has systemic weight, not merely regional significance,” he said.
The escalation also has direct impacts on global energy markets. According to Yakti, energy markets are influenced not only by actual supply but also by risk perception.
In recent times, global oil prices have experienced significant increases due to tanker disruptions, slower production, and concerns about possible restrictions to Strait of Hormuz access.
The effects then spread across various sectors, from electricity costs to shipping industries and food prices. This situation also affects industrial activity in the Asian region due to disruptions to energy supplies and petrochemical raw materials.