The Strait of Hormuz was closed due to the attack on Iran, and business owners are assessing the impact.

JAKARTA, KOMPAS – The invasion of Israel and the United States into Iran, which has resulted in the closure of the Strait of Hormuz, has the potential to increase logistics costs. This could lead to a rise in domestic prices. Business actors are beginning to calculate the impact of this latest escalation on the domestic economy.

The Chairman of the Advisory Board of the Indonesian Retailers and Shopping Center Tenants Association (HIPPINDO), Tutum Rahanta, stated on Sunday (1/3/2026) that currently all business actors are still monitoring the developments of the situation ahead. The attacks by the US and Israel on Iran clearly disrupt trade and logistics routes, especially through the Strait of Hormuz.

The uncertainty that has recently overshadowed the business world is growing. Tutum stated that the pressure on the domestic economy will not directly come through trade routes. This is because the consumer products entering the Indonesian market currently still predominantly originate from Asia, particularly China.

The pressure will come indirectly through the increase in logistics costs, which will ultimately impact the final prices of products circulating in the market.

Tutum stated that entrepreneurs are currently calculating the extent of the impact of the US-Israel attack on Iran in the next 2-3 months. "The possibility of price increases in the future still needs to be prepared in current sales to ensure business continuity," he said.

For logistics fuel, entrepreneurs will continue to pay attention to the steps taken by PT Pertamina (Persero) following the latest turmoil in the Middle East. This is because almost all supplies of fuel oil in the domestic market currently depend on Pertamina's supply, while electricity, of course, relies on PLN.

Therefore, he reminded that domestic price stability will depend on government policies as the main shareholder of those energy companies.

On the other hand, Founder & CEO of Supply Chain Indonesia Setijadi stated that disruptions in the Strait of Hormuz could increase national distribution costs and trigger price hikes for goods domestically. This is because this route accounts for approximately 20 percent of global oil consumption and 20-25 percent of global LNG (liquefied natural gas) trade.

"Any disruption (in the Strait of Hormuz) could push up international energy prices," he said in a written statement on Sunday.

In a more severe scenario, a 30 percent increase in diesel prices could trigger a 10.5-12 percent spike in shipping costs.

Currently, Iran has closed the Strait of Hormuz to international shipping following a combined attack by the US and Israel on Saturday (28/1/2026). Escalation has also increased after the death of Iran's Supreme Leader, Ayatollah Ali Khamenei, as confirmed by Iranian television and the official Iranian news agency, IRNA. Israeli Prime Minister Benjamin Netanyahu claimed this occurred when Israel attacked a complex believed to be where Khamenei was located on Saturday.

The closure of the Strait of Hormuz was announced by the Iranian Revolutionary Guard Corps (IRGC) via high-frequency radio broadcasts on Saturday. Vessels are not permitted to transit through the Strait of Hormuz, leading major oil companies and trading firms to suspend shipments of crude oil, fuel, and LNG.

The Strait of Hormuz is located between Oman and Iran, connecting the Gulf region to the north with the Gulf of Oman to the south and the Arabian Sea on the opposite side.

The presence of the Strait of Hormuz is crucial for the energy market, considering that one-fifth of the total global oil consumption passes through this route. According to data from the analytics company Vortexa, more than 20 million barrels of crude oil, condensate, and fuel passed through the strait every day last year.

OPEC members such as Saudi Arabia, Iran, the United Arab Emirates, Kuwait, and Iraq send most of their crude oil through the strait to Asia. Qatar, one of the largest LNG exporters in the world, also exports nearly all of its LNG production through the strait.

Therefore, the closure of the Strait of Hormuz is expected to soon increase global oil prices (Brent) and impact domestic diesel prices. Currently, diesel is a key component of the operational costs of road transportation, which remains the backbone of the national logistics system.

Setijadi considers this price increase in three scenarios. In the moderate scenario, a global oil price increase of 25 US dollars per barrel could potentially drive the economic price of diesel up by approximately Rp 750-2,000 per liter, depending on the exchange rate and pricing adjustment policies. In a more severe scenario, the global oil price increase could even reach 50 US dollars per barrel.

He continued, assuming that the fuel component accounts for approximately 35-40 percent of the total operating costs of trucks, a 10 percent increase in diesel prices (mild scenario) could drive up transportation costs by about 3.5-4 percent. Meanwhile, if diesel prices rise by 20 percent (moderate scenario), truck costs could potentially increase by 7-8 percent.

"In a more severe scenario, a 30 percent increase in diesel prices could trigger a 10.5-12 percent spike in transportation costs," Setijadi said.

With an average logistics cost in Indonesia of around 14 percent of the product price and approximately half of the logistics components coming from road transportation, Setijadi estimates that a 7-8 percent increase in truck costs could potentially raise the average price of goods by about 0.5 percent.

In more extreme conditions, an increase in trucking costs above 10 percent could push up prices of goods by nearly 0.8 percent, especially for bulky commodities and thin margins such as food, building materials, and fast food consumer products.

Setijadi also reminded that the risk of inflation in production costs impacts food commodities and basic necessities. According to him, industries based on imported raw materials are now facing dual risks, namely the increase in import costs due to the surge in oil prices and the rise in domestic distribution costs.

"The construction and MSME sectors are also relatively vulnerable due to high transportation costs and limited margins," he added.

To that end, Setijadi believes the government needs to maintain the stability of fuel prices through adaptive fiscal policies and accelerate energy diversification. Strengthening multimodal connectivity, particularly optimizing sea and rail transport, is also considered crucial to reduce sensitivity to fluctuations in diesel prices.

In addition, the industry needs to optimize distribution routes, consolidate loads, and implement fuel cost adjustment mechanisms in logistics contracts. "Without structural reforms in the logistics system, any external shocks are at risk of being directly translated into domestic price pressures and a weakening of the purchasing power of the community," he said.