Heaptalk, Jakarta — The outbreak of conflict between Iran and Israel triggered diverse reactions from many sectors, including the oil industry. The Ministry of Energy and Mineral Resources (ESDM) assesses that war could lift oil prices.
The Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, estimates that the Iran-Israel war will raise oil prices by US$5-US$10 per barrel to almost US$100 per barrel. “We believe the risk is around US$5-US$10 per barrel. If the price is now US$90, in our opinion, an increase to nearly US$100 is likely to happen,” Tutuka said, as quoted by Detik Finance (04/16).
The government is concerned that rising oil prices will increase the burden of energy subsidies, as Indonesia currently imports crude oil and fuel, mainly from Singapore and Malaysia. For this reason, Tutuka is coordinating with Pertamina to calculate the impact of the rising crude oil prices on fuel prices in the country.
However, he saw that a decrease would likely follow this surge. Further, his party would still need to monitor the situation closely in the future. “The increase will likely be a spike, then it will fall again. Yet we must not be careless, as in such conditions, even the slightest carelessness could result in a big mistake,” he concluded.
