US-Iran tensions threaten Indonesia's energy and trade sectors, warns Minister

Santoso noted that the greatest impact would occur if global oil distribution is disrupted, including a possible closure of the Strait of Hormuz. He said the energy sector would be the first to feel the effects.

“Fuel prices will certainly rise if that potential closure of the Strait of Hormuz actually happens. Hopefully, it will not happen,” Santoso said here on Monday.

He added that the manufacturing sector is among the most vulnerable. Energy-dependent production processes in Indonesia could face higher operational costs.

Rising production costs, he explained, may reduce business margins or trigger increases in consumer goods prices, potentially lowering the competitiveness of Indonesian products in global markets.

Furthermore, the export sector would face double pressure from higher production costs and weakened global demand amid economic uncertainty.

“Our exports will also see rising costs. That means we and other countries will all be affected. Countries needing raw materials will feel the impact, and finished goods will also be affected,” he said.

To address these risks, he emphasized the importance of safeguarding domestic trade. Domestic consumption, which has long supported economic growth, is seen as a buffer against global fluctuations.

The government will maximize stimulus measures and encourage collaboration with the private sector to maintain household purchasing power, ensuring domestic trade continues despite rising global pressures.

In addition, the government will focus on strengthening the domestic market and diversifying export destinations.

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Translator: Maria, Kenzu