Jakarta. Indonesia could feel the economic tremors of Middle East conflict through higher fuel import bills and increased inflationary pressure at home, economists say.

Data from the Central Statistics Agency (BPS) show significant two-way non-oil and gas trade with Iran, Oman, and the United Arab Emirates.

BPS Deputy for Distribution and Services Statistics Ateng Hartono said Indonesia imported $8.4 million (Rp 141.8 billion) worth of non-oil and gas goods from Iran last year, including fruits, iron and steel, and machinery. Imports from Oman reached $718.8 million, dominated by iron and steel, as well as organic chemicals and construction materials. From the UAE, imports totaled $1.4 billion, led by precious metals and jewelry, along with aluminum and related products.

On the export side, Indonesia shipped $249.1 million in non-oil and gas goods to Iran, mainly fruits, vehicles and parts, and animal or vegetable fats and oils. Exports to Oman stood at $428.8 million, while shipments to the UAE reached about $4 billion, making it the largest trading partner among the three.

The data highlight Indonesia’s substantial trade exposure to economies around the Strait of Hormuz, a key global shipping lane through which roughly 20% of the world’s oil supply passes.

Ateng cautioned that further study is needed to assess the concrete impact on national trade if the conflict intensifies and disrupts maritime traffic.

Economists warn that the bigger risk lies in energy prices. Fakhrul Fulvian, chief economist at Trimegah Sekuritas Indonesia, said geopolitical tensions in the Gulf typically trigger an immediate risk premium in oil markets.

“As a net energy importer, Indonesia cannot avoid the impact,” he said, estimating that every $10-per-barrel increase in oil prices could cut Indonesia’s trade surplus by about $250 million. Indonesia recorded a $0.95 billion trade surplus in January 2026.

Higher crude prices would widen the oil and gas trade deficit, raise import costs, and potentially strain the fiscal budget if fuel subsidies are expanded. Energy state-owned enterprises such as Pertamina could also face pressure on cash flow and financing. Indonesia’s 2025 budget deficit widened to 2.92% of GDP, exceeding the initial target of 2.53%, but remained below the legal limit of 3% to maintain fiscal support.

Domestically, rising fuel costs could spill over into transportation and logistics, pushing up food and consumer prices and adding to inflationary pressures. The extent of the impact, however, will depend on domestic energy pricing policies and the fiscal and monetary response from the government and Bank Indonesia, Fakhrul said.

Komaidi Notonegoro, executive director of the Research Institute for Mining and Energy Economics (ReforMiner Institute), said the Middle East plays a pivotal role in global crude reserves and distribution. Iran holds the region’s second-largest oil reserves and production after Saudi Arabia and controls much of the northern coastline of the Strait of Hormuz.

Around 40% of global oil trade moves through the strait, much of it destined for major Asian economies such as China, India, Japan, and South Korea — countries that together account for roughly 40% of the global economy. Southeast Asian nations, including Indonesia, are also part of this supply chain.

For Indonesia, Komaidi pointed to two areas requiring close attention: liquefied petroleum gas (LPG) and oil.

Indonesia consumes about 9 million metric tons of LPG annually but produces only 1.8 million tons domestically, leaving a shortfall of 7.2 million tons that must be imported. About 40% of LPG imports come from the Middle East, with the remainder largely sourced from the United States.

“If the Strait of Hormuz is disrupted for a prolonged period, Indonesia must quickly secure alternative supply sources to prevent shortages, particularly for household consumption and small businesses,” Komaidi said.

Indonesia’s domestic fuel stockpile is estimated to last between 23 and 25 days. Once inventories are depleted, companies would need to purchase supplies at prevailing global prices. Whether domestic fuel prices rise sharply would depend on the government’s willingness and fiscal capacity to absorb higher costs through subsidies.