Why Electric Vehicles Are Deemed Appropriate Amid Iranian War Turmoil? Here is INDEF's Explanation

JAKARTA – Abra Talattov, Head of the Center of Food, Energy and Sustainable Development at INDEF, believes that accelerating the adoption of electric vehicles (EV) is a crucial strategy to mitigate the risk of crude oil price spikes caused by global geopolitical conflicts against the domestic economy.

“The surge in oil prices due to geopolitical conflict demonstrates that high dependence on imported fuel-based energy is a major risk to fiscal stability and national energy resilience,” Abra stated in a press release in Jakarta on Friday (13 March 2026).

Abra’s statement responded to escalating tensions in the Middle East following attacks in late February 2026.

This situation triggered a surge in Brent crude oil prices of up to 58 per cent, reaching $116 per barrel on 9 March 2026. This outcome far exceeded the oil price assumption in Indonesia’s 2026 state budget (APBN), which was set at $70 per barrel.

Abra explained that the oil price increase could potentially pressure the state budget significantly.

Based on INDEF calculations, each $1 increase in crude oil price per barrel can increase the fiscal deficit by approximately Rp6.8 trillion.

According to Abra, this risk could potentially balloon if accompanied by weakening of the rupiah exchange rate and an increase in government bond (SBN) yields.