Eruption, Geopolitics Weigh on Rupiah as Oil Nears $100

RRI.CO.ID, Jakarta - Global crude oil prices rose again toward $100 per barrel amid escalating military strikes between Iran and the U.S. targeting key oil infrastructure. Driven by these Middle East tensions, Brent crude traded higher around $96.5 per barrel as domestic investors closely await Bank Indonesia's upcoming foreign exchange reserve report.

This forthcoming reserve data is expected to set the immediate tone for domestic markets. Beyond macro figures, however, market participants remain on high alert over Mount Anak Krakatau's eruption, which continues to disrupt flight schedules across Southeast Asia.

Despite these growing regional travel disruptions, the Jakarta Composite Index opened higher at 6,652. This initial resilience was largely fueled by positive momentum across broader Asian equity markets.

Nevertheless, analysts warn that a worsening volcanic eruption could easily derail this momentum and trigger broader financial instability. Reflecting these underlying anxieties, the Indonesian rupiah weakened to 17,665 per U.S. dollar during early trading.

Mirroring the currency’s decline, global gold prices also slipped to $4,414 per troy ounce, or roughly 2.52 million rupiah per gram. These shifts highlight how persistent inflation worries continue to impact global commodities amid geopolitical volatility.

With no major regional economic releases scheduled today, investors are turning their full attention to external risk factors. Market participants remain vigilant, knowing that escalating natural disasters or geopolitical tensions could swiftly force a sharp market correction.

Writer: Gunawan Benjamin (Economist, Islamic University of North Sumatra)