Oil Prices Struggle to Fall, Implications for Stock Investments

The surge in global oil prices has again drawn the attention of market participants amid rising international geopolitical tensions. The conflict involving Iran, Israel and the United States is seen as the primary driver of higher energy prices since the start of the year.

Managing Partner & Founder of PT Ashmore Asset Management Indonesia Tbk, Arief Cahyadi Wana, says the rise in oil prices is not merely a temporary upheaval. ‘We know that since February oil prices have surged. Triggered mainly by the Iran-Israel war and also the United States,’ he said at the SMBC Indonesia Economic Forum 2026 in Jakarta on Tuesday 19 May 2026.

According to him, the surge in oil prices carries impacts that are not entirely positive for energy-importing countries such as Indonesia. However, Arief believes the phenomenon needs to be understood more deeply because it will shape the direction of global investment in coming years.

Ashmore views that world oil prices will not easily return to the lower levels seen a few years ago. He said that global geopolitical shifts are changing the structure of the energy market.

‘The oil prices are unlikely to revert to $50 or $60 per barrel,’ he said.

According to Arief, the current global conditions are characterised by political and geopolitical uncertainty that is increasingly hard to predict. He noted that relations among major nations have also undergone significant changes compared with before.

Arief revealed that a few years ago he discussed with a former foreign minister in an international forum. In that discussion there was a view that many major countries are no longer fully adhering to the principle of sovereignty.

‘He himself said that nowadays many big countries do not comply with sovereignty,’ Arief said. ‘So what is happening now, whether in Iran or Ukraine, is a derivative of governance that has already begun to change,’ he added.

Ashmore has also run simulations of various periods of oil price spikes over the past decades. Based on that analysis, Arief estimates that oil prices will take quite a long time to stabilise again.