Nandito Putra, Jakarta – Deputy Chairman of the Indonesian Association of Energy, Mineral, and Coal Suppliers (Aspebindo), Fathul Nugroho, views the conflict between Israel and Iran, which has triggered a surge in global oil prices, as a potential opportunity for Indonesia to accelerate its efforts towards energy self-sufficiency.
This is because the surge in oil prices should be seen as a warning for the fragility of national energy resilience.
He believes that this momentum should be utilized to speed up national energy self-sufficiency. Fathul evaluates Indonesia's dependence on oil imports has made the national economy very vulnerable to global turmoil.
"This condition should actually be a momentum for Indonesia to accelerate the energy self-sufficiency agenda," said Fathul in a written statement on Monday, June 16, 2025.
Fathul stated that Indonesia still imports about 813,000 barrels of crude oil and fuel products per day. When global oil prices rise, the impact is immediately felt on the oil and gas trade balance and the state budget.
The burden on the state budget, according to Fathul, will have an impact because the assumption of oil prices in the 2025 state budget is only US$82 per barrel, while the market price is now moving towards US$88-90 per barrel. "Every US$1 increase in Indonesia's crude oil price (ICP) could add a subsidy and compensation burden of up to Rp 1.5 trillion per year," he said.
Referring to Refinitiv data, the prices of Brent and WTI oil surged more than 10 percent in mid-June 2025 due to market concerns over the escalation of the Israel-Iran conflict. Fathul warned that this situation reflects previous crisis patterns, such as the 1990-1991 Gulf War or the energy crisis in 1973-1979, when oil prices sharply rose in a short period.
He also highlighted the importance of strengthening the capacity for national fuel storage and strategic reserves. Currently, Indonesia only has operational reserves for about 22 days of consumption. "Dependence on oil imports makes Indonesia very vulnerable to external shocks. History has shown that conflicts in the Middle East always trigger global energy crises. Therefore, the energy self-sufficiency agenda must not be postponed any longer," he said.