Luhut Predicts Iran Will Not Maintain Strait of Hormuz Closure Long, Remains Dependent on Oil Exports
Jakarta, Kompas.com — Luhut Binsar Pandjaitan, chairman of the National Economic Council (DEN), has predicted that Iran will not maintain a closure of the Strait of Hormuz for an extended period.
The reason is that the country remains heavily dependent on oil supplies and the vital oil export route.
Luhut made this statement whilst reporting on the implications of United States-Iran tensions to President Prabowo Subianto during a full cabinet meeting at the State Palace, Presidential Palace Complex, central Jakarta, Friday (13 March 2026).
He also prepared three scenarios with implications for rises or falls in global oil prices.
Nevertheless, he is confident that Indonesia will remain in good shape during the extended Eid al-Fitr holiday for 1447 H/2026 CE.
“Therefore, we come with various scenarios and we will observe developments over the next one or two weeks. So I think during Eid everything will be fine,” Luhut said.
The first scenario presented by Luhut concerns conflict escalation, which is predicted to trigger global oil prices to surge to between 110 and 150 US dollars per barrel.
According to Luhut, escalation could occur if Iran launches direct attacks on American assets in Gulf countries, closes the Strait of Hormuz for more than seven days which would trigger a spike in insurance premiums and shipping costs, large-scale proxy attacks, and total failure of the transition council following the death of Supreme Leader Ayatollah Ali Khamenei, thereby creating instability.
“Because they (Iran) hope a transition will occur in Iran. But if that continues to fail, it will not be easy to manage. But I asked their representatives and they are optimistic it will happen, so we just need to observe,” Luhut said.
The second scenario is a prolonged condition, or prolonged conflict, which would trigger global oil prices to remain in the range of 80-110 US dollars per barrel.
This condition could occur when access to the Strait of Hormuz is limited with repeated threats, limited precision attacks continue, negotiations progress slowly with tightened sanctions, while Iran manages to restore some of its missile and drone capacity.
The third scenario is de-escalation, which would lower crude oil prices to between 65-80 US dollars per barrel.
This condition occurs when there is a ceasefire mediated by international parties, no disruption to distribution at the Strait of Hormuz so Iran’s oil exports to various countries can proceed normally, and the transition council stabilises, enabling a controlled transition of leadership.
“With de-escalation we will also see that (crude oil prices) will fall to 65-80 dollars. But we all should…, be careful about this,” Luhut said.