Iran-US Ceasefire and Its Impact on Indonesia

June 23, 2025, marks an unusual moment in the history of global conflict. Donald Trump, known for his harsh rhetoric, welcomed the ceasefire with a seemingly hopeful statement: "Congratulations world, it's time for peace." However, behind that sentence, the world witnessed a geopolitical drama that was almost theatrical. Iran, before launching missiles at the Al-Udeid military base in Qatar, actually issued a warning to the United States.

This measured and predictable counterattack is not about escalation, but rather about maintaining each side's prestige. It is a quiet compromise that allows both to claim a winning position without actually going to war. What we are witnessing is a new form of conflict: not physical warfare, but rather economic, energy, and psychological influence. This ceasefire resembles a grace period. It is neither an end nor a solution, but rather a pause between two major rounds.

Oil prices are one of the first indicators that are directly affected by the dynamics of this conflict. The market responds quickly. Brent crude oil prices immediately fell by 7.2 percent to 71.48 US dollars per barrel. This is the sharpest decline since 2022. Certainly, this is not just a number on the trading board; it signifies significant savings for importing countries such as Indonesia.

A simple calculation shows that a decrease of 1 US dollar per barrel could reduce the burden on the state budget by up to Rp 1.2 trillion. If prices remain around 75 US dollars, fuel subsidies for 2025 could be cut by Rp 35 trillion. For the government, this presents a fiscal opportunity. There is room to breathe amid financing pressures.

However, this euphoria should not blind us. If this ceasefire is only temporary, the risk of a price surge will become very real. If the situation heats up again and prices soar to 100 US dollars per barrel, the budget deficit could exceed Rp 210 trillion and foreign exchange reserves could be rapidly depleted.

If we look from the perspective of diplomacy, there are lessons to be learned from the role of Qatar. The country does not remain passive. They play a dual role: serving as a host for a U.S. military base while simultaneously managing the flow of funds to groups such as Hamas. They are active, concrete, and intelligent. Indonesia, despite being vocal in defending Palestine, is still mired in the symbolic realm. Our country has not yet sent field hospitals to Gaza, and there has been no tangible assistance following the renewed conflict between Iran and Israel. The world notes actions, not just statements.

If we look at it in the context of defense, such a ceasefire is a signal for countries to prepare. Iran and Israel will use this pause to enhance their systems. Iran is rebuilding its missile reserves, while Israel is updating its air defense systems. Indonesia should not merely be a spectator.

Indonesia needs to develop an early warning system, including observation satellites and strengthening cyber units. The development of surveillance drones, defense cooperation with non-aligned countries, and joint military exercises could be ways to fill this quiet period with thorough preparation.

Indonesia must not be satisfied with merely loud voices. The world assesses the consistency between words and actions. The proposal to make Galang Island or Morotai a neutral zone for Middle Eastern negotiations could serve as an opening. Sending humanitarian ships, building floating hospitals, or channeling logistics to Gaza through neutral routes would be far more appreciated than statements made in international forums.

However, this cannot be done haphazardly. The utilization of strategic islands must be accompanied by serious research on the conflict map in the Middle East to avoid missteps. On the other hand, this is an opportune moment to accelerate refinery projects such as Tuban and Cilacap, which have long been stalled. Oil prices are currently low, and if we do not act now, when will we?

We can also increase national crude oil reserves when prices are low as long as there is still fiscal space. Domestic energy readiness is not only about the economy, but also about national security. The plan must be designed with innovative financing schemes such as blended finance involving the private sector and international institutions considering the limitations of the state budget.

Geopolitical shocks never occur in isolation. When the Iran-US conflict escalated, Indonesia's investment risk index rose by 18 percent. This means that global investors view Indonesia as a country significantly affected by global tensions. The impacts can be felt in various areas, from the slowing flow of capital, increasingly unstable exchange rates, to a domestic business climate that is becoming more unpredictable. This surge in risk is further complicated by the ongoing escalation of the situation in the Middle East.

America's actions to limit Iran's role through economic sanctions and to suppress Turkey's influence in the region have made the situation in the Middle East increasingly uncertain. The impact is felt even in the fluctuating energy prices and the disrupted global supply chains. Indonesia needs to prepare. Fiscal policies must be agile, and energy sources must become more diverse.

One option that can be pursued is to issue global bonds to strengthen liquidity reserves. However, this must be done with precise calculations, using assumptions that align with the current economic realities, as stated in the IDX 2024 report, in order to instill confidence in investors.

In addition, the government can also lobby the IMF to increase Indonesia's Special Drawing Rights (SDR) quota by 15 percent. All of this cannot proceed independently. There must be close coordination with all parties, including international financial institutions, so that the funds obtained can be used appropriately and not wasted. This additional fiscal space could serve as a cushion if the world suddenly becomes unstable, especially if tensions in the Middle East escalate and turn into a major crisis that disrupts global trade and supply chains.

While the world's attention is focused on the Middle East, the South China Sea could become a vulnerable point that may be exploited. If tensions rise there, it is not impossible that Indonesia could be drawn into the competing interests of two giants: the United States and China. If Trump loses influence, it is possible that the direction of U.S. foreign policy could change completely, potentially becoming more aggressive, or it could retreat from the stage altogether. Both scenarios put our position at risk.

Maritime diplomacy must be strengthened, and cooperation with ASEAN should not merely be a discourse on paper, but must be genuinely implemented. Beyond that, there is another equally serious threat, which is food security. The conflict between Ukraine and Russia remains unresolved, and if the situation worsens, global wheat prices could surge by up to 12 percent. Indonesia, which still relies on wheat imports, will clearly be affected. Indonesia must act swiftly. Food diversification is imperative. This includes expanding agricultural land, developing local seeds, and preparing national stock reserves that must be established immediately.

Indonesia cannot continue to be reactive to global developments. We must formulate a more progressive and responsive diplomatic strategy. In addition to strengthening relations with ASEAN, we should also expand our network to the Gulf countries, Africa, and South America. The world is no longer centered on a single power. The economic and political landscape is increasingly dispersed, and developing countries are beginning to take on important positions.

Indonesia actually has the opportunity to take further steps, starting by inviting the Philippines and Australia to establish a joint monitoring system in conflict-prone maritime areas. Such cooperation could serve as a strong foundation for maintaining regional stability. Of course, it must be based on maritime security cooperation and regional humanitarian aid logistics management. All of this requires a tangible presence and the courage to take a stand.

The ceasefire between Iran and the United States is not the end of the conflict. It is merely a pause. Indonesia has a choice: to remain a spectator or to begin becoming an active player. Take advantage of low oil prices to strengthen national energy. Reinforce defense and early detection systems. Take a position on global issues not to seek the spotlight, but to strengthen bargaining power.

Sawqi Saad El Hasan,Lecturer of Sharia Business Management, STEBIS Bina Mandiri Cileungsi