United State and Israel military strike on Iran, followed by retaliatory actions from Tehran, threatens to disrupt global supply chains and drive up energy prices. Indusytry players warn that if the conflict spreads to involve other major powers, it could further unsettle markets and destabilize the global economy.
Yukki Nugrahawan Hanafi, a member of the advisory board of the Chartered Institute of Logistics & Transport (CILT) Indonesia and chairman of the advisory board of the Indonesian Logistics and Forwarders Association (ALFI/ILFA), said the escalating conflict poses serious political and economic risks.
“The escalation of this conflict has immediately drawn global attention to potential disruption of the global logistics supply chain, which could put pressure on the economies of many countries,” Yukki said.
He cautioned that further Iranian retaliation, particularly in the Strait of Hormuz, could severely affect the flow of oil and gas from the Middle East. The strait is a strategic energy corridor, handling a significant share of global oil shipments.
The impact on markets was evident on Feb. 28, when West Texas Intermediate (WTI) crude rose to $67 per barrel and Brent crude reached $72.80 per barrel.
Yukki noted that at least six major oil-exporting countries – Saudi Arabia, Iraq, United Arab Emirates, Kuwait, Qatar, and Iran – could face disruptions to their export routes if tensions intensify. Import-dependent economies including India, China, Japan, and countries in Southeast Asia could also be affected.
Higher energy prices, he said, could fuel inflation, erode consumer purchasing power, delay global interest rate cuts, and undermine market confidence. Fiscal resilience in several countries could also come under pressure.
“Throughout 2025, the global economy was already under strain, particularly from U.S. trade tariffs. With this new shock, further weakening of economic growth in various countries is likely due to rising energy commodity prices and increased logistics costs,” he added.
Impact on Indonesia
Yukki identified two immediate risks for Indonesia, a net oil importer. First, higher oil import costs could expand the fiscal burden. Rising energy subsidies could strain the state budget, while adjustments to domestic fuel prices could drive inflation and increase logistics costs.
Second, global uncertainty could trigger capital outflows, weakening the rupiah as investors seek safe-haven assets such as the U.S. dollar and gold. Selling pressure in domestic stock and bond markets could further erode the currency, pushing up import costs and inflation.
The situation may prompt Bank Indonesia to maintain elevated interest rates to stabilize the exchange rate, Yukki said.
“These issues need to be closely monitored by the Indonesian government to prepare for various scenarios if the conflict continues,” he added.