The new round of conflict between the United States, Israel, and Iran is not a distant story confined to the Middle East. It carries immediate risks for economies across Asia, none more vulnerable than Indonesia’s. The economic fallout is already visible. If the crisis persists, the consequences could reshape fiscal policy, corporate balance sheets, and everyday prices for Indonesian households.

Oil markets have responded sharply. Crude prices climbed after U.S. and Israeli strikes on Iran in early 2026, jumping more than 10 percent in a matter of days and trading near multi‑month highs. Analysts warn that Brent crude could surge to $100 per barrel or more if tensions disrupt flows through the Strait of Hormuz, the narrow chokepoint that handles roughly 20 percent of the world’s oil exports. 

For Indonesia, this is not an abstract energy story. The country remains a net importer of crude oil and finished fuels.

A sudden spike to $100–$120 per barrel would hit the state budget hard. Government simulations show that each $1 per barrel rise above the budget assumption adds roughly Rp10.3 trillion to public spending.

A sudden spike to $100–$120 per barrel would hit the state budget hard. Government simulations show that each $1 per barrel rise above the budget assumption adds roughly Rp10.3 trillion to public spending.

Under a $100 to $120 oil price........

© Middle East Monitor