Tangerang. An analyst said Thursday that Iran’s looming blockade of the Strait of Hormuz could be a wake-up call for Indonesia to get its palm oil biodiesel policy in full swing.

The Israel-Iran war has sparked worries over oil supplies. The Iranian parliament recently backed a measure to close the Strait of Hormuz, a strategic waterway that facilitates the transport of more than a fifth of the world’s oil supply.

The planned closure, which didn't materialize, was a retaliation option that Tehran was considering after Israel’s most powerful ally, the United States, struck Iranian nuclear facilities.

Israel and Iran are currently on a fragile US-brokered ceasefire, but the 12-day war has shown how important it is for Indonesia to cut down on its oil imports and secure its domestic energy supplies. To this end, Indonesia should ramp up its palm oil biofuel production, according to energy expert Satya Widya Nugraha.

Indonesia has what it calls the B40 policy, which mandates a 40 percent mix of palm oil-based fuel in its biodiesel. The number corresponds to the percentage of palm oil content in the biodiesel. There are plans to further increase the mandatory blend, even up to B100 or having the biodiesel entirely derived from palm oil.

“President Prabowo Subianto has been pretty clear about his intentions on developing biomass. We also have the B40 policy, and plans are underway to raise it to B100 eventually. This is what we mean by moving towards energy self-reliance,” Satya said at the B-Universe Media Holdings office in Pantai Indah Kapuk 2, Tangerang.

Indonesia is the world’s largest palm oil producer; thus, the government’s choice to pick this commodity for its biodiesel mandate. The resource-rich nation has been raising its mandatory palm oil blend over the years, and aims to increase it to 50 percent in 2026. Indonesia has also allocated 15.6 million kiloliters of biodiesel for 2025 distribution.

The Indonesian Palm Oil Association (Gapki) data showed that nearly 4.1 million tons of the country’s palm oil had gone to domestic biodiesel consumption so far this year as of April. The country, however, did not export any biodiesel in January-April 2025 despite having sold 40,000 tons overseas over the same four-month period last year.

“The more we are less reliant on others, the smaller the impact of a regional or global-scale tension on our country,” Satya said.

Later that day, Juan Permata Adoe, a deputy chairman at the Indonesian Chamber of Commerce and Industry (Kadin), also commented on the biodiesel mandate. Asked whether Indonesia could export its biodiesel amid the global oil supply risk, Juan said it’d be best to prioritize domestic supplies first before exploring such a possibility. 

“Because this biodiesel acts as an import substitution under the B40 program,” the businessman said.

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