Iran’s Hormuz Strait Plan Threatens Global Oil Flow

A potential closure of the Strait of Hormuz by Iran could significantly disrupt global oil supplies. This action, if implemented, poses a considerable challenge for Indonesia, impacting its crucial oil imports. The situation is under close observation.

Impact on Indonesia

The Indonesian Foreign Minister, Sugiono, has stated that if Iran proceeds with closing the Strait of Hormuz, it could impact Indonesia’s oil supply. A significant 20.4% of Indonesia’s oil imports pass through this strategic waterway.

Sugiono highlighted that a closure could potentially affect up to a fifth of the world’s oil supply, emphasizing the gravity of the situation. The Indonesian government is actively monitoring the developments in the Middle East.

“We also continue to monitor the ceasefire and peace (efforts) that are currently taking place in the region,”

—Sugiono

He expressed his hope for a lasting ceasefire and peace within the region.

Geopolitical Tensions

Iran’s parliament approved a bill to close the Strait of Hormuz to naval traffic. This action followed a U.S. airstrike on three nuclear sites within the country. The Strait of Hormuz is a critical route, being the only path for oil exports from the Persian Gulf.

Global oil prices could surge if the Strait of Hormuz closes. According to the U.S. Energy Information Administration, approximately 30% of all seaborne-traded crude oil and other petroleum liquids pass through the Strait of Hormuz (EIA 2024).

Ongoing Monitoring

The Indonesian government, according to Sugiono, is closely monitoring the situation. They are also keeping tabs on the ceasefire and peace initiatives in the region, hoping for their long-term success.