Resilience and Energy Transition Amid Global Geopolitical Turmoil

Lessons that can be drawn from the impact of the current Middle East crisis are to gradually end excessive dependence on imported food.

Jakarta (ANTARA) - The protracted Iran versus US-Israel coalition conflict is having a serious impact on regional tensions, particularly in the Middle East, a region known as a large-scale oil producer.

Such geopolitical tensions are no longer merely displays of military power but also affect disruptions in fossil energy supplies to several importer countries, including Indonesia.

Geopolitical tensions in the Middle East are fundamental to the global oil supply and demand. Their elasticity in response to rises in world oil prices has the potential to be greater than the Russia-Ukraine conflict.

It is said to have a fundamental impact because of Iran’s position as a member of the Organisation of Petroleum Exporting Countries (OPEC), which can influence OPEC in the form of crude oil production quotas and pricing policies.

World oil prices have surged sharply, exceeding $100 per barrel, and even reached the range of $116—$119 per barrel for Brent type, after the United States (US) and Israel military attacks on Tehran triggered escalation in the Middle East conflict.

The global energy market immediately reacted, especially when Iran closed the Strait of Hormuz, the world’s most vital energy distribution route.

For the global energy market, disruption to the Strait of Hormuz is not merely a regional event. This strait is the lifeline of global oil trade, so any threat to it immediately affects the market.

Even without actual supply disruptions, expectations of potential distribution disruptions are sufficient to trigger oil price volatility.

Indonesia’s Anticipation