MPR Leadership Urges Government to Monitor Crude Oil Price Surge and Its Impact on State Budget
Jakarta — Vice-Chairperson of the People’s Consultative Assembly (MPR) from the National Mandate Party (PAN) faction, Eddy Soeparno, has warned the government to be vigilant about the surge in global crude oil prices resulting from conflict in the Middle East involving Iran, the United States, and Israel.
According to Eddy, the rise in oil prices could strain the State Revenue and Expenditure Budget (APBN) and widen the state budget deficit. The crude oil price assumption in the APBN macroeconomic framework stands at USD 70, with the budget deficit projected at 2.68 per cent of GDP. However, should crude oil prices exceed USD 100 per barrel, the budget deficit could surpass 3.6 per cent, as indicated by officials at the Ministry of Finance.
Global crude oil prices have surged more than 30 per cent to around USD 107 per barrel within a week following attacks by the United States and Israel against Iran. Price increases of this nature are commonplace during armed conflicts, Eddy noted.
Major energy-importing nations such as China, India, Japan, and South Korea will likely seek alternative oil supply sources outside the Middle East. Potential producer nations include Nigeria, Angola, and Brazil, which also serve as oil suppliers to Indonesia. This presents Indonesia with an opportunity to compete for crude oil supplies alongside these major oil-importing nations.
Beyond rising oil prices, weakening of the rupiah exchange rate against the US dollar could further increase the burden of energy imports. The government must remain vigilant not only regarding rising energy prices but also concerning supply availability. Security of supply has become critical given the global oil trade deficit resulting from a potential closure of the Strait of Hormuz, which would leave numerous countries scrambling for alternatives. Many of these nations are willing to purchase oil and gas products at prices higher than market rates.
Nevertheless, Eddy expressed confidence that the government has prepared alternative sources for energy import supplies from other countries, including the United States, ensuring Indonesia possesses diversified supply sources.
The situation in the Middle East intensified after Israel reportedly struck Tehran, Iran, on Saturday (28 February 2026). The attack was reported to have occurred near the office of Iran’s Supreme Leader, Ali Khamenei. News agencies Tasnim and Fars subsequently confirmed Khamenei’s death. To date, mutual attacks have continued to escalate across the broader Middle Eastern region.