The escalation of armed conflict between the United States-Israel and Iran, now entering its fourth day, is beginning to trigger global concern. The impact of geopolitical tensions in the Middle East not only overshadows the safety of Indonesian citizens (WNI) in the conflict zone but also threatens domestic economic and political stability. Analysts predict this crisis has the potential to last for a long time and demands a swift response from the government.
A number of Indonesian citizens living in the Gulf region, such as the United Arab Emirates (UAE) and Saudi Arabia, reported tightening security situations. The level three alert status implemented in the UAE triggered concerns over citizen safety due to airport closures and flight disruptions. Meanwhile, in Riyadh, an explosion caused by a drone strike near the US Embassy shocked local residents. The Indonesian Ministry of Foreign Affairs continues to urge citizens in the affected areas to increase vigilance and immediately report themselves through the official Peduli WNI portal.
Domestically, anxiety over the economic impact is beginning to be felt by the middle class. Ahead of Ramadan and Lebaran, some residents admitted to cutting back on non-primary spending budgets and shifting their investment portfolios to safe-haven assets like gold. This policy was taken to anticipate potential spikes in basic commodity prices and adjustments in non-subsidized fuel (BBM) prices, which are starting to creep up due to disruptions in the Strait of Hormuz logistics route.
To secure the national energy supply, the Ministry of Energy and Mineral Resources (ESDM) has prepared a diversification scheme for crude oil and LPG imports. The government has begun shifting import sources from the Middle East to alternative countries, including the United States and the Southeast Asian region. Although the national fuel (BBM) and LPG stocks are currently claimed to be secure for the next 23 days, limited domestic storage capacity remains a crucial challenge that must be addressed immediately.
A spike in global crude oil prices, which could potentially cross 100 US dollars per barrel, is projected to put heavy pressure on the 2026 State Budget (APBN). With the Indonesian Crude Price (ICP) macro assumption set at 70 US dollars per barrel, the government faces a dilemma between ballooning energy subsidies or raising subsidized fuel prices. Some economists suggest the government evaluate big-budget strategic programs, such as the Free Nutritious Meal (MBG) program, to keep fiscal space secure.
From the domestic political aspect, President Prabowo Subianto has held strategic meetings with national figures such as Joko Widodo and Susilo Bambang Yudhoyono. This step is viewed by several analysts as a form of political consolidation to mitigate the impact of global shocks so they do not turn into domestic political instability. Clear foreign policy alignment and managing public purchasing power are key for Indonesia to weather this geopolitical storm.
