Hormuz Breakthrough Fuels Indonesian Market Rally; Stocks and Rupiah Strengthen

Reportedly, the official signing ceremony is scheduled for Friday (19 June 2026), in Switzerland. Both US President Donald Trump and Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed the finalized Memorandum of Understanding (MoU) between both sides.

Baring any unforeseen circumstances, this means the Strait of Hormuz will be fully open to trade again. Hence, global oil prices fell around 4 percent on Monday (15 June 2026), with Brent heading towards USD $80 per barrel, while WTI (West Texas Intermediate) fell similarly to hover around USD $75.

The sudden drop in oil prices has immediate, major implications for the global economy. First, cheaper crude means immediate downward pressure on transportation, shipping, and manufacturing costs worldwide. For major central banks —most notably the US Federal Reserve and the European Central Bank—this sudden drop provides a massive cushion to potentially ease up on tight interest rate cycles. Second, tanker freight rates and marine insurance premiums, which had skyrocketed due to the high-risk wartime environment in the Persian Gulf, are expected to adjust downward rapidly as safe travel resumes.

Third, countries that rely heavily on oil imports will see a massive improvement in their trade balances and those that heavily subsidize fuel consumption (such as Indonesia) will see a reduction in government fiscal strain.

And so, for Indonesia, today was a great day. Policymakers must be extremely relieved seeing the oil price falling while capital inflows make the rupiah strengthen by almost 1 percent against the US dollar on Monday (15 June 2026). The rupiah is now traded at IDR 17,690 per US dollar.

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