Indonesia may be far from the Strait of Hormuz, but it remains economically exposed to any major disruption there. Following the military escalation involving Iran in late February 2026, ship traffic through the Strait fell by 97%, threatening one of the world’s most important routes for crude oil, LPG, LNG, and fertilizer trade. This report examines how that shock could affect Indonesia through energy imports, shipping costs, industrial inputs, inflation, and the broader macroeconomy.

The findings show that Indonesia’s exposure is significant. Around 20.5% of crude oil imports and 37.1% of LPG imports are linked to Middle Eastern routes transiting Hormuz, while higher freight, insurance, and fuel costs would add pressure across supply chains. Under a 20% import disruption scenario, the report estimates GDP growth could slow to 4.88%, inflation could rise to 3.16%, and the trade balance could deteriorate. The report argues that Indonesia should combine short-term energy and fiscal buffers with longer-term structural measures, including supply diversification, refinery upgrades, and faster renewable energy deployment.