US – Iran War and Shocks to Energy Prices:
The United States (US) – Iran war transmits globally through large-scale disruptions in energy and trade flows. The Strait of Hormuz carries around 20 million barrels of oil per day, about one-third of global seaborne crude, plus one-quarter of natural gas liquids and one-fifth of LNG flows. With traffic disrupted, oil prices rose above USD 100 per barrel on March 2026, with relevant benchmarks around USD 91.8 (+27%) and gas at EUR 55.8 (+74%), pushing global inflation and costs upward. Financial markets weakened, volatility increased, and Asia, absorbing around 80% of Hormuz oil flows, faced the strongest pressure.
Scenario-wise, the quantitative divergence is substantial. A baseline scenario assumes oil prices remain elevated through Q3 2026 before gradually easing, implying manageable inflation and limited growth damage. However, a prolonged disruption scenario, especially if Hormuz remains constrained, risks sustained oil prices well above baseline, amplifying inflation and potentially triggering a broader global slowdown. Conversely, a ceasefire or negotiated settlement would reduce risk premia, normalize oil flows, and stabilize growth. The key variable across all scenarios is not the initial shock size, but the duration and persistence of supply disruption and uncertainty.
Energy Price Volatility and Ramadan Spending Surge:
For Indonesia, exposure of the ongoing geopolitical tensions in Middle East is indirect but systemic. Direct oil imports from Iran are minimal at USD 0.42 million out of USD 891.8 million, but reliance on suppliers like Saudi Arabia (USD 267.4 million; 8.84%) and the UAE (USD 200.6 million; 6.34%) transmits potential shocks. Rising energy costs drive inflation, capital outflows pressure the rupiah, and liquidity tightens, while exports and investment weaken and fiscal burdens rise. Domestically, Ramadan spending shows resilience, with Mandiri Spending Index (MSI) at 123.5 (W+3) growing 0.94% Week over Week, supported by middle (8.2% YoY) and upper-income groups (7.3% YoY). However, this is insufficient to offset the broader macro squeeze from external shocks and tightening financial conditions.
Regionally, spending growth is increasingly driven by areas outside Java. Weekly growth in Java stands at 0.88%, while Sumatra (1.25%) and Sulawesi (1.19%) outperform on March 2026, reflecting a stronger impact of THR disbursement in these regions. However, growth in Balnusra remains relatively limited at 0.31%, while overall momentum shows a gradual shift toward eastern Indonesia, even though some regions still lag behind their 2025 performance. From a sectoral perspective, spending is becoming more broad-based. Consumer goods remain the main driver with 1.4% WoW growth, followed by electronics and leisure at 0.9% WoW, and household spending at 0.5% WoW. This indicates a transition from essential to more discretionary spending during Ramadan. However, mobility-related spending grows only 0.4% WoW, signaling that travel activity remains subdued.
