Global Oil Could Hit US$100 per Barrel as Middle East Tensions Escalate

TEMPO.CO, Jakarta - Global oil prices could climb to US$100 per barrel if geopolitical tensions in the Middle East continue to escalate, an Indonesian economist has warned, as crude benchmarks jumped sharply at the start of the week.

As of Monday afternoon, March 2, 2026, Brent crude was trading at around US$79 per barrel, up from its Saturday close of US$72.8, according to data compiled by Trading Economics. Meanwhile, West Texas Intermediate (WTI) futures rose to US$72.3 per barrel, from US$67.2 previously.

Fahmy Radhi, an economist at the Faculty of Economics and Business at Gadjah Mada University (UGM), said the spike reflects mounting fears that conflict in the Middle East could disrupt global supply.

“The increase in oil prices is an inevitable consequence of the ongoing war,” Fahmy said on Monday. “If the aggression continues and expands, I estimate prices could reach US$100 per barrel.”

Escalating Conflict

The recent surge followed a joint military strike by the United States and Israel on Iran on Saturday, February 28, 2026, which triggered retaliatory moves and heightened concerns of a broader regional conflict. The situation has shown little sign of easing.

According to a March 2 report by the Daily Mail, former US president Donald Trump suggested that a potential war with Iran could last up to four weeks.

Adding to market anxiety are reports that Iran’s Islamic Revolutionary Guard Corps (IRGC) has blockaded the strategically vital Strait of Hormuz, a key artery for global oil shipments.

Any prolonged disruption in the waterway — through which roughly a fifth of the world’s oil supply passes — could severely strain global energy logistics.

“If global oil trade routes are effectively closed, supply chains will be disrupted, and prices will inevitably rise,” Fahmy said.

Echoes of 2022

Fahmy noted that crude prices briefly surpassed US$100 per barrel in 2022 following Russia’s full-scale invasion of Ukraine. At the time, fears of supply shortages pushed global benchmarks to multi-year highs.

“It is not impossible that this will happen again,” he said, warning that markets are highly sensitive to geopolitical shocks involving major energy producers or transit routes.

Implications for Indonesia

As a net oil importer, Indonesia would face significant economic pressure if prices reach triple digits.

Fahmy said non-subsidized fuels such as Pertamax, which are priced according to market mechanisms, would adjust in line with global oil movements and therefore may not pose a major fiscal challenge.

However, the government could face a difficult choice regarding subsidized fuels such as Pertalite gasoline and Solar diesel. If retail prices are kept unchanged despite rising global costs, the state budget would have to absorb higher subsidy expenditures. Conversely, raising prices could fuel inflation and erode household purchasing power.

“With tensions between the US, Israel, and Iran as intense as they are, any further escalation would push global oil prices even higher,” Fahmy said.

Read: How Indonesia and the United States Reached an Unequal Trade Deal

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