Oil Prices Continue to Climb on Day Five of Iran-Israel Conflict
Global oil prices continued to rise on the fifth day of the Iran-Israel conflict in the Middle East. Citing Trading Economics data, Brent crude futures on Wednesday, 4 March, breached the US$82 per barrel level. The price rose 1.26 percent, extending gains for the fourth consecutive session. On a monthly basis, Brent has jumped more than 22 percent.
The advance was driven by the intensifying clash involving Iran, Israel, and the United States. Attacks and retaliations targeting regional energy infrastructure have unsettled markets over global supply, particularly after the closure of the Strait of Hormuz, a chokepoint through which around 20 percent of global oil and LNG trade flows.
Iraq, one of the major producers, was reported to have cut production by about 1.5 million barrels per day, amounting to almost half of its output, due to storage constraints and export bottlenecks. If exports do not recover promptly, the production halt could reach nearly 3 million barrels per day.
Trading Economics analysis suggested Iran was targeting tankers in the Strait of Hormuz, halting energy traffic for several days.
Earlier, the price surge had been tempered after US President Donald Trump said the US government would insure ships to safeguard energy and trade flows, and would provide naval escort if necessary. Meanwhile, data from the American Petroleum Institute (API) showed US crude inventories rose by 5.6 million barrels last week, above market expectations.
West Texas Intermediate (WTI) crude also rose to around US$75 per barrel, tracking the Brent rise.
Impact on Indonesia
The surge in oil prices could weigh on Indonesia’s economy, which remains dependent on energy imports. Moshe Rizal, chairman of the National Oil and Gas Company Association (Aspermigas), said the rise in oil prices would directly affect import costs for fuel, given Indonesia is a net importer. Transactions denominated in US dollars could also pressure the rupiah and widen the budget deficit if prices stay high.
With the conflict showing no signs of abating, Rizal explained that global energy markets remain shadowed by uncertainty. For Indonesia, oil price pressures are not only about supply but also fiscal stability and the exchange rate.
Meanwhile, Energy and Mineral Resources Minister Bahlil Lahadalia is preparing worst-case scenarios should the conflict persist. Noting that around 20–25 percent of Indonesia’s crude supply comes from the Middle East, the government is shifting part of its imports away from the region to the US to secure supply, particularly if the Straits of Hormuz closures persist. Bahlil also stressed that price volatility of oil and the Iran conflict would not lift domestic fuel prices. “Whatever the rise, the price will stay the same until there is a government change,” he said at a press briefing in his Jakarta office on Tuesday, 3 March 2026.