Indonesia Urged to Anticipate Potential Closure of Bab el-Mandeb Strait

RRI.CO.ID, Jakarta - Indonesia’s trade resilience faces new risks due to the potential closure of the Bab el-Mandeb Strait, a strategic waterway linking the Red Sea with the Gulf of Aden and the Indian Ocean. The government has been urged to act swiftly to prepare diplomatic and economic mitigation strategies.

Executive Director of the Center of Economic and Law Studies (CELIOS), Bhima Yudhistira, said diplomatic efforts with Yemen and Iran are a priority to ensure the continuity of logistics flows. The Bab el-Mandeb Strait is a vital corridor through which about 12 percent of global trade passes, serving as the fastest route from Asia to Europe and Africa.

“The government must immediately implement mitigation measures. First, lobby the governments of Yemen and Iran to ensure that cargo ships carrying Indonesian goods are not hindered,” Bhima said in Jakarta on Monday, March 30, 2026, as quoted by Antara.

He noted that disruptions to the strait could slow the distribution of national exports and imports. Experience from 2023–2024 showed that shipping times could increase by up to 15 days, accompanied by a surge in logistics costs due to security risks and higher insurance premiums.

Data from January 2026 shows that Indonesia’s exports to Europe accounted for 13.4 percent of total national exports. A closure of the strait could dampen trade performance while increasing pressure on the rupiah.

Bhima also warned that global oil prices could rise above USD 120 per barrel if energy distribution routes are disrupted, triggering import inflation, particularly in the food and energy sectors. He added that raw materials for fertilizer also pass through the strait, and the fertilizer crisis is already putting pressure on agricultural producers.

He suggested the government accelerate budget reallocation for energy and fertilizer subsidies. Additional spending is estimated at IDR 515 trillion (approx. USD 30.30 billion), assuming that a USD 1 increase in oil prices adds IDR 10.3 trillion to the State Budget burden. “In villages where diesel fuel usage for generators is high, they can be encouraged to switch to alternative energy,” he said.

Geopolitical tensions involving the Houthis in Yemen, who are supported by Iran, have heightened risks of disruption to global energy distribution. If the conflict escalates, ships may be rerouted via the Cape of Good Hope in South Africa, adding 10–15 days to voyage times and significantly increasing logistics costs.

The Bab el-Mandeb Strait, which connects Asia–Europe trade routes through the Suez Canal, remains a critical chokepoint for global commerce. Current tensions in the Strait of Hormuz, combined with instability in the Strait, could exacerbate the global energy crisis. ***