US-Iran War Triggers Oil Price Surge, UMY Expert Warns of This

The armed conflict between the United States, Israel, and Iran, which has lasted more than a month, is beginning to show serious impacts on the global economy. One of the most evident indicators is the rise in world oil prices.

A lecturer in International Relations and Vice Rector for University Development, Al-Islam, and Muhammadiyah Affairs at Universitas Muhammadiyah Yogyakarta (UMY), Prof. Faris Al-Fadhat, M.A., Ph.D., assesses that this war is no longer regional in nature but has broad implications for global economic stability.

“This is no longer just a war between three countries or one region. Its impact is already global, particularly on the economic sector and the world supply chain,” said Faris in a written statement on Wednesday (8/4/2026).

According to him, one of the most crucial impacts is the potential slowdown in the global economy. Projections for world economic growth in 2026, previously at around 2.7-3.3 percent, are now at risk of disruption. He even warns of the potential for a recession if the conflict continues without a solution.

“If this war cannot be navigated well, the potential for recession is wide open. The impact will be felt on the global supply chain, from basic needs like food to the industrial sector,” he continued.

Oil Becomes the Main Trigger of Disruption

Faris highlights energy, particularly oil, as the key factor in this crisis. Disruptions in the energy sector could have a domino effect on various other sectors, including manufacturing, technology, and the food industry.

He also explains that the rise in oil prices is triggered by two main factors: supply disruptions and psychological market factors. Geographically, the world’s oil distribution routes heavily rely on the Middle East region, particularly the Strait of Hormuz.

“Around 40 percent or more of the world’s oil supply comes from that region and passes through the Strait of Hormuz. If this route is disrupted or blocked, the global supply will be directly affected,” he clarified.

This situation is worsened by market panic that drives prices even higher. Oil prices, which previously ranged from $62-70 per barrel, once breached $100, and are now still at a high level of around $90 per barrel.

Real Impacts for Indonesia

For Indonesia, as a semi-oil producing country, the impact is significant. Domestic oil production, which only ranges from 600,000-700,000 barrels per day, is unable to meet national consumption needs of 1 million barrels per day.

“We are still in deficit, so we must import. When global prices rise, the state’s budgetary burden also increases,” he said.

He added that the government faces a dilemma between maintaining subsidies or passing on the price increase to the public. If subsidies are increased, the State Revenue and Expenditure Budget (APBN) will be strained. Conversely, if prices are raised, inflation will rise and affect people’s purchasing power.

“If this continues, not only the energy sector will be affected, but the entire economy will fluctuate,” he added.

Global Diplomacy Needed

Faris emphasises that the main solution to this crisis is stopping the conflict through diplomatic channels. He encourages Indonesia, particularly together with ASEAN countries, to be active in international mediation efforts.

“No party truly benefits from this war. Therefore, resolution through multilateral diplomacy is very important to restore global economic stability,” he concluded.