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View all search resultsBusinesses on edge as US-Iran conflict chokes fuel supply, boosts inflation
To mitigate further impacts, Indonesia is seeking alternative oil import sources outside the Middle East, including from the US.
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A boat approaches the St Kitt's and Nevis-flagged container ship Marsa Victory while cruising in the waters of the Strait of Hormuz off the coast of Khasab in Oman's northern Musandam peninsula on June 25, 2025. (AFP/Giuseppe Cacace)
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usinesses are bracing for potential economic fallout from the escalating conflict in the Middle East, as strikes by the United States and Israel against Iran are expected to unsettle markets, imperil energy supplies and push up input costs.
“[Local] businesses are currently concerned about rising oil and gas prices, as well as higher international logistics costs. Even without a physical closure of key shipping routes, uncertainty alone can drive up both,” Indonesian Employers Association (Apindo) chairwoman Shinta Kamdani told The Jakarta Post on Monday.
The impact on businesses will vary, with energy-intensive and trade-exposed industries likely to feel the most immediate pressure, Shinta said.
“Indirect effects through higher global energy prices, trade disruptions, food inflation, currency volatility and financial market sentiment may prove even more significant for domestic businesses,” she added.
Saleh Husin, deputy chairman for industry at the Indonesian Chamber of Commerce and Industry (Kadin), told the Post on Monday that sectors dependent on imported raw materials, such as petrochemicals, steel, textiles, electronics and automotive, may see rising logistics and energy costs, as well as shipment delays that erode their profit margins.
US and Israeli strikes that killed Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday have sown chaos, with Iranian retaliation rocking Gulf cities, airlines canceling flights and tankers halting transit through the Strait of Hormuz, a vital shipping lane for oil leaving the Middle East.
Brent crude jumped 13 percent to US$82 per barrel on Monday morning, the highest level in 14 months.
