JAKARTA, KOMPAS.com - An observer from the Centre for Indonesian Mining and Resources Law, Ryad Areshman Chairil, said Indonesia will be in chaos if Iran closes the Hormuz Strait.
"The Hormuz Strait is very important in the oil distribution chain, not just for Indonesia, but also the world. In Indonesia, 60 percent of the oil and gas that is managed by Cilacap Refinery comes from Iran," said Chairil during a discussion entitled "Reviews of Alternative Oil Fuel Regulations: Adding Subsidy, Restriction, or Price Increases" in Jakarta on Thursday.
He further said, regarding the international political economy of energy, that 20 percent, or about 17 millions barrel of oil from Middle East countries, is transported through the Hormuz Strait each day. In the last few days the international community has expressed concern that Iran will close the Hormuz Strait as a reaction to sanctions from Western countries caused by Iran's continuing progress in developing nuclear technology.
The sanctions included import reductions of Iranian oil and a ban on financial transactions with Iran. "The Cilacap Refinery is very important in Indonesia and highly dependent on Iranian oil. If the oil supply from that country was closed, the national oil supply would be very limited," said Chairil.
The Cilacap Refinery now provides 44 percent of the nation's energy needs and 75 percent of the energy for Java Island. Chairil further said the worst scenario in Indonesia, if the Hormuz Strait was closed and Indonesian oil supplies were depleted, was that the country¿s economy could cease to operate, along with all transportation and even the supply of electricity.
"The RI Government can do nothing because the Hormuz Strait is beyond Indonesian authority," he added.
On the other hand, an economist from Gadjah Mada University, Anggito Abimanyu, said the impact of closing of the Hormuz Strait would be felt by all countries in the world, not just Indonesia.
"Therefore, I think there will be an international solution for this problem. We do not have to worry."
