TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani Indrawati said that the escalating geopolitical tensions in the Middle East have garnered the attention of global leaders, and have several significant economic implications.

“We still hope that both parties will steer clear of open war. However, we must be aware of these tensions,” Sri said at a press conference on the State Budget (APBN) in Central Jakarta on Friday, April 26.

The state treasurer elaborated that the escalation has resulted in a surge in oil prices, with global crude oil prices momentarily exceeding US$90 per barrel, before correcting to the current level of US$88 per barrel.

On a year-to-date (ytd) basis, she said, the increase in Brent oil prices was 14.3 percent. Meanwhile, WTI oil prices have risen 17.5 percent. She believed that this could not be denied due to the unfolding events in the Middle East.

Therefore, she concluded that Indonesia needs to remain alert to the possibility of supply chain disruptions, particularly in the oil and gas sector. This is because the current geopolitical situation remains dynamic, and the trend of high oil prices is likely to impact the country.

“The impact is on both the government budget and the Indonesian economy, which in turn can put pressure on inflation,” said Sri Mulyani.

RIANI SANUSI PUTRI

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