What the Iran War is Costing Indonesia

Fifty days into the Iran War, Indonesia finds itself navigating a significant global energy shock with a response that has been both steady and proactive. Despite sharp oil price increases and currency pressure, the government has prioritized domestic stability—holding fuel prices constant for over 280 million people while maintaining fiscal discipline. Strong pre-crisis fundamentals have provided a solid base to absorb the immediate impact.

At the same time, Jakarta has moved quickly to secure energy supply and reinforce its position. Through swift diplomatic engagement, Indonesia has diversified its sources and strengthened strategic partnerships, ensuring continuity in critical energy flows while reinforcing broader economic ties.

The crisis has also accelerated structural reforms that had long been in discussion. Most notably, the push toward large-scale solar development signals a shift in framing energy transition as a national security priority—highlighting a more forward-looking and resilient policy direction.

In our latest Wellington Snapshot, we outline the key developments, trade-offs, and implications of this response. While challenges remain, Indonesia’s approach reflects a broader strategic shift—using the crisis not only to stabilize, but to build a stronger foundation for the years ahead.

Wellington Snapshot - What the Iran War is Costing Indonesia – 50 Days and Counting.pdf

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