Israel-Iran Conflict Triggers Oil Price Increase, Member Of Commission XI Of The House Of Representatives Highlights Additional Burden For The State Budget

JAKARTA - World oil prices jumped close to 80 dollars a barrel on Monday, June 23, 2025, following news of US involvement in helping Israel attack Iran.

Member of Commission XI of the House of Representatives from the National Awakening Party faction, Bertu Merlas, assessed that this price spike could have a serious impact on the national economy and the government must immediately anticipate the economic impact of heating up the Middle East conflict involving Israel, Iran, and the United States.

"The increase in world oil prices will certainly increase the heavy burden on our state budget, especially for fuel subsidies. We hope that the government will immediately take anticipatory steps so that the impact of the Middle East war does not further slow down economic growth, which has slowed down recently," he said, Monday, June 23.

He added that this year the government has budgeted a fuel subsidy of Rp. 26.7 trillion. However, if world oil prices continue to soar, the budget will certainly swell.

The war that has occurred will have an impact on other countries including Indonesia. We hope that the Indonesian government must immediately anticipate the economic impact that will increase the burden of the state budget," he said.

Furthermore, he explained that the increase in oil prices would affect various domestic industrial sectors such as the price of raw materials, production costs, and distribution, which would eventually reduce people's purchasing power.

"We are all in an uncertain global situation. The government must move to anticipate the continued impact of this war," he said.

He also highlighted the risk of lowering the rupiah exchange rate against the US dollar which could disrupt the domestic supply chain plus if Iran closed the Strait of Hermuz, which is the main route to world oil trade from the Persian Gulf region.

This painting is the main route for world curvature and gas kings such as Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Qatar, Iraq and Kuwait in oil trading. If this is closed it will certainly trigger extraordinary economic turmoil," he said.

Bertu urged the Ministry of Finance and other relevant institutions to immediately coordinate across sectors to formulate mitigation measures and prevent the impact of the conflict from expanding on the national economy.

"The government must immediately move to provide protection to people who are worried that prostitution will receive the impact of this war. We ask the public, especially small and medium enterprises, to be given training to be empowered during a situation like this," he concluded.