Jakarta. Jakarta Composite Index (JCI) tumbled sharply on Monday, shedding 248.32 points or 3.27% to close at 7,337, as soaring global oil prices and escalating tensions in the Middle East rattled financial markets.

Total trading value on the Indonesia Stock Exchange reached Rp 23.7 trillion ($1.40 billion). Market breadth was heavily negative, with 73 stocks advancing, 744 declining, and 141 unchanged. Trading volume reached 42.9 billion shares across 2.41 million transactions.

Pilarmas Investindo Sekuritas said Indonesian equities fell in line with Asian markets as the US–Israel conflict with Iran deepened, intensifying concerns over global inflation driven by surging energy costs. The brokerage noted that the war has entered its second week with no clear resolution, while several key Middle Eastern oil producers, including Kuwait, Iran, and the United Arab Emirates, have cut crude output after shipments through the Strait of Hormuz were halted.

This disruption pushed oil prices above $100 per barrel, raising fears that prolonged conflict could severely disrupt global energy supply. Pilarmas warned that higher energy costs could pressure oil-dependent economies while fueling inflation risks and threatening global growth.

Political developments in Iran also added uncertainty after Mojtaba Khamenei was appointed Supreme Leader following the death of his father, signaling that hardline leadership remains firmly in control.

Meanwhile, weaker-than-expected US employment data released Friday initially strengthened expectations that the Federal Reserve might ease monetary policy. However, the sharp rise in oil prices has revived inflation fears, reducing speculation of near-term rate cuts.

“Surging oil prices are reigniting inflation concerns and shifting expectations for imminent rate cuts by the Fed,” Pilarmas said.

From the domestic front, Indonesia’s state budget posted a deficit of Rp 135.7 trillion in February 2026, equivalent to 0.53% of gross domestic product (GDP). Pilarmas warned that the ongoing spike in global crude prices could further burden the 2026 state budget (APBN) and widen the fiscal deficit.

Finance Minister Purbaya Yudhi Sadewa said the government may consider trimming spending in the Rp 335 trillion Free Nutritious Meal (MBG) program if oil prices continue to surge and push the 2026 budget deficit beyond the 3% safety limit. He stressed, however, that the core funding for the program will remain protected.

“The budget for the MBG program will not be cut, except for spending that is not productive,” Purbaya said. “For example, if suppliers propose buying additional motorcycles or computers that are not directly related to providing meals, we will reject those requests.”

Across Asia, markets also plunged as oil prices surged to levels not seen in more than a decade.

Japan’s Nikkei 225 dropped 5.2% to 52,728, while South Korea’s Kospi slumped 6% to 5,251. In Greater China, losses were more moderate, with Hong Kong’s Hang Seng falling 1.6% to 25,343 and the Shanghai Composite declining 0.7% to 4,097.

Oil prices surged after both sides in the conflict targeted new sites over the weekend, including civilian infrastructure. Bahrain accused Iran of striking a desalination plant vital for drinking water in Gulf countries, while Israel reportedly attacked oil depots in Tehran.

WTI crude oil futures briefly surged as much as 31% on Monday before paring gains to trade about 12% higher above $100 per barrel. Meanwhile, Brent crude climbed 15.43% to $107 per barrel as of 3:21 p.m. Jakarta time.

Energy prices have reached their highest levels in at least 14 years, reflecting concerns that the conflict could disrupt oil and gas production and shipping routes across the Persian Gulf.

“The market woke up to the sound every macro trader dreads, the oil alarm bell. And this time it was not a polite chime. It was a fire siren,” said Stephen Innes of SPI Asset Management.

Analysts warned that persistently high oil prices could revive global inflation and weigh on economic growth.

“Oil prices will reach a peak at some point, maybe they already have, maybe there’s more to come, but they are likely to fluctuate at elevated levels for weeks, perhaps months,” said Ipek Ozkardeskaya of Swissquote. “During this period, high energy prices will revive inflation globally and weigh notably on growth.”

In the United States, markets also ended lower last week. The S&P 500 fell 1.3%, while the Dow Jones Industrial Average dropped 453 points or 0.9% after earlier plunging as much as 945 points. The Nasdaq Composite slid 1.6%.

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