TEHERAN – The ongoing conflict between Israel and Iran is taking a significant economic toll, with the Israeli Finance Ministry estimating losses of 9 billion shekels (approximately $2.9 billion USD or Rp49 trillion) per week, according to reports from Sindonews.com. The escalating tensions, marked by recent Israeli strikes and Iranian responses, are raising concerns about broader regional instability and potential disruptions to global trade and energy supplies.
The Israeli government, as reported on March 4, 2026, is framing its actions against Iran as akin to counterterrorism operations against non-state actors, a characterization that Tehran disputes. This framing, according to sources, is intended to garner international support for its military actions and justify targeting Iranian leadership. However, Israeli officials acknowledge that eliminating Iranian leaders will not fundamentally alter the situation, suggesting a longer-term strategy focused on fostering a more “Iran-friendly” government or creating conditions for regime change.
Economic Fallout and Global Concerns
The economic repercussions of the conflict are already being felt, with potential disruptions to global supply chains – particularly those related to energy and oil – identified as a primary concern. Indonesia’s Ministry of Finance is closely monitoring the situation, particularly the potential closure of the Strait of Hormuz, a critical waterway for global oil transport, as reported by Antara News. The potential for increased volatility in global financial markets is also a key area of focus for Indonesian economic officials.
Despite these risks, Indonesia’s external fundamentals remain relatively strong, with a trade surplus maintained for 69 consecutive months as of January 2026. The surplus reached $950 million in January, driven by a 3.39% year-on-year increase in exports, particularly in non-oil and gas sectors like processed industries, palm oil, nickel, iron, steel, automotive, and electronics. This positive trade balance offers some buffer against external shocks, but the potential for weakened external demand and increased logistics costs due to the conflict remains a threat to Indonesia’s export performance.
Israel’s Strategy and Anticipated Duration
According to information from Israeli military sources, further Israeli bombing of Iranian targets is anticipated for at least another two weeks. The stated goal of these continued strikes is to weaken the Iranian government and potentially incite popular unrest, though the likelihood of such an outcome remains uncertain. The Israeli military reportedly believes that sustained pressure will create an environment conducive to internal opposition within Iran.
The conflict’s economic impact on Israel is substantial. The Rp49 trillion weekly loss represents a significant strain on the Israeli economy, and further escalation could exacerbate these challenges. The long-term consequences of the conflict, both economic and political, remain to be seen.
Regional Implications and Indonesia’s Position
The conflict between Israel and Iran is unfolding against a backdrop of broader geopolitical tensions in the Middle East. The potential for escalation, involving the United States, is a major concern for regional and global stability. Indonesia, as a non-permanent member of the UN Security Council, is likely to play a role in diplomatic efforts to de-escalate the situation and prevent further conflict. The Indonesian government has consistently called for peaceful resolutions to international disputes and emphasized the importance of upholding international law.
The Indonesian government is also anticipating the potential impact of the conflict on domestic purchasing power, as reported by Google News. While the immediate effects are still being assessed, officials are preparing for potential inflationary pressures and disruptions to supply chains that could affect consumers.
The situation remains fluid and unpredictable. The next key developments to watch for include further statements from Israeli and Iranian officials, any potential interventions by the United States or other international actors, and the impact of the conflict on global energy markets. Continued monitoring of the situation by the Indonesian Ministry of Finance and other relevant agencies will be crucial in mitigating potential risks to the national economy.
This is a developing story. We encourage readers to share their perspectives and engage in constructive dialogue in the comments section below.
