Jakarta. Rupiah weakened further on Friday, edging closer to the Rp 17,000 threshold as surging global oil prices and renewed geopolitical tensions in the Middle East boosted demand for the US dollar.

The rupiah closed down 67 points against the US dollar on Friday afternoon at Rp 16,960, after briefly slipping by as much as 70 points from the previous close of Rp 16,893.

Ibrahim Assuaibi, director at Traze Andalan Futures, said the currency was under pressure from a spike in global oil prices following the closure of the Strait of Hormuz.

According to Ibrahim, Iran’s new leader Mojtaba Khamenei recently stated that the Strait of Hormuz would remain closed. He noted that the narrow waterway is a critical global energy route through which roughly one-fifth of the world’s oil and gas supply passes.

“The closure of the strait has triggered what could be the largest supply disruption in the history of the global oil market,” Ibrahim said in a written statement on Friday.

The rupiah also came under pressure as markets increasingly expect the Federal Reserve to reconsider short-term interest rate cuts if inflation accelerates.

Such expectations could strengthen the appeal of the US dollar and weigh further on emerging market currencies, including the rupiah.

Investor attention is also focused on recent US inflation data. The Consumer Price Index released on Wednesday showed inflation largely stable in February compared with the previous month.

However, Ibrahim said the figures did not yet reflect potential inflationary pressures from the recent surge in oil prices linked to the US-Israel campaign in Iran.