Jakarta. Rupiah extended its losses on Tuesday afternoon, sliding deeper past the Rp 17,100 level as escalating tensions in the Middle East rattled global markets and lifted oil prices.

The local currency closed down 70 points against the US dollar at Rp 17,105, after briefly weakening by as much as 75 points from the previous close of Rp 17,035.

Ibrahim Assuaibi, director at Traze Andalan Futures, said the rupiah’s decline was driven by heightened market focus on developments in the Middle East, particularly ahead of a deadline set by Donald Trump regarding the reopening of the Strait of Hormuz.

“Disruptions to tanker traffic in recent weeks have tightened supply expectations and increased risk premiums across oil markets,” Ibrahim said in a statement on Tuesday.

The situation has added pressure on the rupiah, as energy market volatility spilled over into broader financial markets.

Tensions have escalated further after diplomatic efforts to de-escalate the conflict failed. Iran rejected a US-backed proposal outlining a 45-day ceasefire and a phased reopening of the strait, alongside broader negotiations on sanctions relief and reconstruction.

The rupiah weakened further after Trump reaffirmed that the deadline to reopen the Strait of Hormuz was a firm measure, warning that failure to comply could trigger US strikes on Iranian infrastructure.

“This confrontation has disrupted global energy flows and pushed oil prices higher, raising inflation concerns and complicating the monetary policy outlook,” Ibrahim said.