What the Iran War Could Mean for Indonesia’s Energy Transition
What the Iran War Could Mean for Indonesia’s Energy Transition
The tremors of war never stay in one place. Distance is an illusion. They cross oceans, moving through space and time.
The Strait of Hormuz may be far from Indonesia. But when that route is disrupted by the Iran war, the shock is quickly felt in energy prices, the state budget, and the direction of our energy transition.
This narrow passage carries more than a quarter of the world’s seaborne oil trade and about a fifth of global LNG trade. When the flow is disturbed, prices jump, and importing countries like Indonesia absorb the risk.
For Indonesia, the first blow comes from import dependence. A significant share of its crude oil imports and 30 percent of its LPG imports still come from the Middle East. That is why the government has begun shifting part of its crude purchases to the US.
The strain does not stop at energy markets. It also reaches the state budget, where higher oil prices could push the deficit to around 3.6 percent of GDP if the government does not adjust its spending. Money that should help grids, renewables, and low carbon transport can end up consumed by short term energy stabilisation.
At the same time, crises make old habits look practical. LNG freight rates have jumped more than 40 percent, most LNG moving through Hormuz still heads to Asia, and Indonesia’s latest power plan still leaves room for new coal and gas. This is how the transition can slow, not because the vision disappears, but because yesterday’s answers suddenly look easier.
This crisis exposes something Indonesia can no longer afford to ignore. Fossil energy may look familiar, but in moments like this it is neither reliably cheap nor reliably secure. When conflict disrupts supply routes, the real value of renewables, energy efficiency, electrification, and public transport becomes clearer. They are not just part of a climate agenda. They are part of a national buffer against external shocks.
For Indonesia, that changes the meaning of the transition. The Iran war may complicate the path in the short term, but it also makes the destination harder to dispute. A faster shift to domestic clean energy, stronger grids, and lower fuel import dependence is no longer only about emissions. It is also about building an economy that can stand more firmly when the world becomes unstable.
For transformational leadership, storms are not obstacles. They are the winds that quicken the pace of change.


