Luhut: Oil Could Reach 150 US Dollars Per Barrel If Iran-Israel War Escalates
Jakarta — The conflict between Iran and Israel has prompted the government to prepare for various scenarios regarding movements in global oil prices. The National Economic Council (NEC) has even projected that global crude oil prices could spike sharply to 150 US dollars per barrel if military escalation in the Middle East increases significantly in the near term.
NEC Chair Luhut Binsar Panjaitan stated that the government has developed three main scenarios depicting possible directions for global oil prices, depending on how the conflict in the region unfolds over the next one to two weeks.
“We are presenting various scenarios, and we will see developments over the next one to two weeks. I believe during Ramadan, everything will be fine,” he said whilst delivering a report to President Prabowo Subianto during a Full Cabinet Session at the State Palace on Friday, 13 March 2026.
According to Luhut, each scenario depicts different levels of conflict escalation, ranging from major war expansion, prolonged conflict, to de-escalation of military tensions in the Middle East region.
In the most severe scenario, military escalation is expected to increase within the next one to two weeks, so oil prices could potentially surge to between 110 and 150 US dollars per barrel, or approximately Rp 1,815,000 to Rp 2,475,000 per barrel.
The situation could be further exacerbated by major attacks from proxy groups and the failure of the political transition process expected to occur in Iran.
“Additionally, if we look at it, this escalation to complete failure of the Transition Council — because they are hoping for a transition in Iran — but if that fails completely, well, that also won’t be easy to overcome. However, I asked them, and they are optimistic that it will happen, so we should just monitor the situation,” he added.
Beyond this scenario, the government also projects the possibility of conflict lasting longer without major escalation. In this condition, oil prices are estimated to move between 80 and 110 US dollars per barrel, or approximately Rp 1,320,000 to Rp 1,815,000 per barrel.
In such a prolonged conflict situation, tensions are expected to trigger restrictions on access to the Strait of Hormuz, limited precision strikes that continue, slow-moving negotiations, and tightened sanctions against Iran. At the same time, Iran is expected to partially restore its missile and drone capabilities.