Iran-US-Israel Conflict: MPR Deputy Highlights Crude Oil Price Surge

Deputy Chairman of the MPR from the PAN faction Eddy Soeparno has highlighted rising crude oil prices resulting from the conflict between the United States, Israel, and Iran. One week after US and Israeli strikes on Iran, oil prices surged more than 30 percent to USD 107 per barrel.

Eddy noted that crude oil prices are predicted to rise further due to the ongoing conflict. He assessed that rapid and drastic price increases will burden Indonesia’s state budget for an unpredictable duration.

“I discussed projections for oil and gas prices in the short term with colleagues from the banking sector who work in commodity trading. The discussion covered prospects for oil and gas price increases if the conflict continues for three to twelve months ahead, including which countries would benefit and which would be disadvantaged by this situation,” Eddy stated in his statement on Monday (9 March 2026).

This was communicated following a zoom conference call with several oil and gas observers in Singapore and Tokyo on Monday (9 March).

Eddy explained that China, India, Japan, and South Korea—countries that rely on oil and gas supplies from the Middle East—will certainly seek new alternatives. These alternatives include Nigeria, Angola, and Brazil, which are also oil and gas suppliers to Indonesia.

“In other words, we have the opportunity to compete for crude oil supplies with giant oil-importing countries,” he noted.

This University of Indonesia political science doctor explained that the implications of rising crude oil prices for Indonesia are quite challenging given that Indonesia’s oil and gas requirements are 1 million barrels per day. When crude oil prices rise significantly and the rupiah weakens against the dollar, the burden of oil and gas imports becomes increasingly heavy.

“Moreover, if crude oil prices are based on the state budget’s macro assumptions of USD 70, and the deficit is at 2.68 percent of GDP, then with oil and gas prices rising above USD 100 per barrel, the possibility of the budget deficit could exceed 3.6 percent, as stated by officials at the Ministry of Finance,” said Eddy.

Eddy disclosed that in 2025 Indonesia imported approximately 17.6 million tonnes of crude oil and 37.8 million tonnes of petroleum products worth USD 32.8 billion or IDR 551 trillion. With the assumption that import volumes will remain the same, current foreign exchange requirements will increase to purchase oil and gas products at higher prices and a weaker rupiah exchange rate.

“We need to be wary of disruptive conditions in the energy market not only from rising oil and gas prices, but also from supply availability. Security of supply becomes very important because the global oil and gas trade deficit resulting from the closure of the Strait of Hormuz will cause several countries to scramble for substitutes. Many of these countries are willing to purchase oil and gas products at prices higher than market rates,” he said.

Eddy is confident that the government has prepared alternative sources of imports from other countries, such as the United States. This way, Indonesia has adequate diversification of supply sources.

“What we really need to pay attention to is: to what extent is the fiscal resilience of oil and gas-importing countries in meeting their oil and gas requirements when prices continue to rise for an extended period?” he concluded.