Jakarta.Indonesia’s benchmark Jakarta Composite Index (JCI) slid on Monday as a surge in oil prices and rising war fears in the Middle East rattled global markets following US and Israeli military strikes on Iran.

The index dropped 218 points, or 2.65%, to close at 8,016, after trading within a range of 8,016 to 8,133 during the session. Trading activity remained heavy. Total volume reached 56.43 billion shares with a turnover of Rp 29.65 trillion ($1.75 billion) across more than 3.6 million transactions. Declining stocks dominated the session, with 671 shares falling, compared with 108 gainers and 41 unchanged.

Analysts at Pilarmas Investindo Sekuritas said the JCI and most Asian stock markets fell in tandem as tensions intensified in the Middle East. Through their research note, the brokerage said the United States and Israel launched military strikes on Iran over the weekend that killed Iran’s Supreme Leader Ayatollah Ali Khamenei and effectively shut the Strait of Hormuz, a key global energy shipping route. Iran responded with missile attacks targeting US assets in neighboring countries.

Pilarmas said the escalation has heightened fears of a broader conflict, threatening global energy price stability and supply chains. US President Donald Trump has also indicated the conflict could last up to four weeks. “The immediate impact was visible in the Indonesian market, as investors grew concerned that geopolitical tensions could put pressure on domestic fiscal and monetary conditions, including the possibility of rising fuel subsidies if oil prices surge” Pilarmas added.

Despite the market turmoil, the brokerage noted that several domestic economic indicators remain supportive. Data from S&P Global showed Indonesia’s Purchasing Managers’ Index (PMI) rose to 53.8 in February 2026, up from 52.6 in the previous month, signaling continued expansion in manufacturing activity.

Pilarmas said the rise was driven by stronger new orders, which pushed production higher and indicated the manufacturing sector remains in expansion territory.

Meanwhile, the Central Statistics Agency (BPS) reported Indonesia posted a $960 million trade surplus in January 2026, although this was lower than the $2.51 billion surplus recorded in the previous month.

Inflation also remained elevated. Pilarmas said February inflation reached 0.68% month-to-month and 4.76% year-on-year, indicating price pressures remain above Bank Indonesia’s target range of 2.5% ±1%.

Global markets were also shaken by the conflict. The strikes triggered a surge in oil prices and broad declines across most Asian equities.

The price of US benchmark crude jumped 9% to $73 per barrel, while Brent crude rose nearly 10% to around $80 per barrel.

In mainland China, the Shanghai Composite bucked the regional trend, climbing 0.5% to 4,182, helped by gains in oil-related stocks including CNOOC, China Petroleum & Chemical, and PetroChina, which hit their 10% daily limits.

Elsewhere, Hong Kong’s Hang Seng fell 2.1% to 26,059, while Japan’s Nikkei 225 ended 1.4% lower at 58,057.24, recovering from earlier losses as defense-related companies such as Mitsubishi Heavy Industries and IHI Corp. advanced. Markets in South Korea were closed for a holiday.

Investors are increasingly betting the conflict could disrupt oil supplies from Iran and other parts of the Middle East. Attacks across the region, including on two vessels traveling through the Strait of Hormuz, have constrained oil exports.

Stephen Innes of SPI Asset Management said the waterway remains a critical artery for global energy supply, noting that roughly one-fifth of global oil and LNG flows pass through the strait.

A prolonged conflict could push fuel prices higher and ripple across the global economy by raising production costs.

Iran exports roughly 1.6 million barrels of oil per day, mostly to China. Any disruption could force buyers to seek alternative supplies, potentially driving energy prices even higher.

However, some analysts noted the market reaction was somewhat muted because the attacks had been widely anticipated following a major buildup of US forces in the Middle East.

The conflict has also temporarily shifted market focus away from artificial intelligence-related developments that have dominated global markets in recent months.

On Friday, US markets ended lower, with the S&P 500 falling 0.4%, the Dow Jones Industrial Average dropping 1.1%, and the Nasdaq Composite declining 0.9%, marking just the second losing month in the past ten months for the S&P 500.

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