OJK Reveals Three Impacts of the Middle East Conflict: Oil Prices, Inflation, and Foreign Capital Inflows

JAKARTA — The Indonesian Financial Services Authority (OJK) says the conflict in the Middle East could affect global oil prices, inflation, and foreign capital inflows. This was stated by Acting Chair and Vice Chair of the OJK Board of Commissioners Friderica Widyasari Dewi at the OJK February 2026 RDKB press briefing at the agency’s office in Jakarta on Tuesday, 3 March 2026. “We observe that there are three possible transmission channels from this geopolitical tension,” said Friderica Widyasari Dewi, known as Kiki. “The disruption, if prolonged, could pose a risk of higher global oil prices, noting that around 30 percent of world oil supply is distributed via the Hormuz Strait.” “Additionally, LNG prices could also be significantly affected. So we are anticipating the domestic ripple effects related to these oil prices,” she added. Kiki continued that a rise in global inflation will influence central bank policies worldwide, especially those related to policy rates. This condition would tighten liquidity in global financial markets and spill over into slower economic growth. “Thus we also see potential competition for these funds, so we must ensure our domestic readiness to face this high global exposure,” she said. Consequently, Indonesia is urged to strengthen integrity, liquidity, and credible governance so that its stock market remains competitive and attractive to global investors. As the regulator, OJK is committed to structural reforms to strengthen the fundamentals of the financial sector, including continuing reform programs to enhance integrity and liquidity in the market. OJK, together with the Self-Regulatory Organization (SRO), has prepared a series of policy instruments to be deployed as and when needed should undesirable market fluctuations occur. “We also urge financial institutions to continue monitoring global dynamics, including potential impacts, and, above all, to bolster risk management and conduct stress testing across various scenarios,” she said.