Moscow's Shadow War Makes Hormuz Resolution Harder — And Indonesia's Oil Bill Keeps Growing

The US-Israel war on Iran just got significantly more complicated.

US officials have confirmed that Russia is providing Iran with satellite imagery and intelligence data on the locations of American warships, aircraft, and military infrastructure across the Middle East, according to reports from NBC News, The Washington Post, and The New York Times. The intelligence sharing represents a major escalation in the geopolitical dimensions of the conflict — and it dramatically reduces the odds of a quick resolution.

For Indonesia, an oil-importing nation already staggering under the weight of Brent crude at $92 per barrel, the implications are stark: this war is not ending soon, and the economic pain is likely to deepen.

What Russia Is Providing

According to four sources with knowledge of the matter cited by NBC News, Russia's intelligence assistance includes:

  • Satellite imagery showing the real-time positions of US warships and military aircraft in the Persian Gulf and wider Middle East
  • Targeting data that could help Iran locate American radar systems, communication infrastructure, and command-and-control facilities
  • Battle damage assessments allowing Iran to evaluate the effectiveness of its missile and drone strikes

The intelligence does not appear to include direct strike coordination — Russia is not guiding Iranian missiles to specific targets. But the assistance has made Iranian attacks notably more precise than in previous confrontations. Nicole Grajewski, an expert on Russia-Iran cooperation at Sciences Po in Paris, noted that Iran's strikes appear to be deliberately targeting US command and control infrastructure, a pattern that mirrors Russian air campaign tactics in Ukraine.

"They appear to be going after command and control" for US forces, Grajewski told NBC News.

Iran has only a limited number of military-grade satellites and lacks its own satellite constellation, making Russian imagery particularly valuable. The tactical improvement is visible: Iranian Foreign Minister Abbas Araghchi told NBC News that Iran is receiving "political and otherwise" support from Russia and China, though he declined to specify details "right in the middle of the war."

Day Eight and Counting

The war is now in its eighth day with no ceasefire in sight. Key developments as of Saturday:

  • Trump demands "unconditional surrender" — The US president has rejected any negotiated settlement, saying he must have a role in choosing Iran's next leader after the killing of Supreme Leader Khamenei in a strike on Day 1
  • Iran rejects negotiations — Foreign Minister Araghchi told NBC News there is "no request for a ceasefire," signaling Iran intends to fight on
  • IDF claims near-complete air superiority — Israel says it has carried out 2,500 strikes and destroyed 80% of Iran's air defense systems
  • The war keeps spreading — Iranian drones struck Azerbaijan's airport, a new front. Israel continues bombing Beirut and Tehran. Iran struck a Bahraini oil refinery and targeted UAE and Qatari infrastructure
  • 1,332 killed in Iran since operations began, according to available counts
  • Cost: $3.7 billion for the first 100 hours of Operation Epic Fury, according to CSIS estimates, with $3.5 billion unbudgeted

Trump, asked about Russian intelligence assistance to Iran, dismissed it as a "stupid question," insisting the campaign was going "very well" and that he would rate it "a 12 to a 15" out of 10.

Why This Matters for Indonesia's Economy

The Russia factor changes the calculus on how long this war — and the Hormuz disruption — will last. Russian intelligence support makes Iran more capable of sustaining its resistance, targeting US vulnerabilities, and prolonging the conflict. Every additional week of Hormuz closure compounds the damage to oil-importing economies like Indonesia's.

Here is the arithmetic Jakarta is staring at:

  • Budget assumption: Indonesia's 2026 state budget prices oil at $70/barrel
  • Current Brent price: $92.69/barrel — a 32% overshoot
  • Weekly oil cost: Every $10/barrel increase adds roughly $3-4 billion annually to Indonesia's oil import bill
  • Subsidy pressure: Indonesia's fuel subsidies — which keep Pertalite at Rp 10,000/liter and diesel at Rp 6,800/liter — are absorbing the entire price shock. The longer oil stays above $85, the greater the fiscal strain
  • Forex reserves: Already down to $151.9 billion in February, before the oil surge hit
  • Rupiah: Weakening against the dollar, making dollar-denominated oil imports even more expensive in local currency terms

Deputy Finance Minister Purbaya has said fuel price hikes are a "last resort" — but with oil 32% above budget assumptions and no end to the conflict in sight, that last resort is inching closer.

The Broader Asia Supply Chain Crisis

Indonesia is not suffering alone. The Hormuz closure is rippling across Asian economies:

  • Chandra Asri (TPIA), Indonesia's sole naphtha cracker, has declared force majeure on all contracts
  • Singapore's Aster Chemicals has also declared force majeure
  • Vietnam's Binh Son Refining has asked its government to restrict crude exports to protect domestic refinery supply
  • Asian refinery run rates are being cut across the board as feedstock becomes scarce
  • India's crude basket has hit $85/barrel, a 19-month high

The longer Russia helps Iran sustain its war effort, the longer Hormuz stays closed, and the deeper these supply chain wounds become.

What to Watch

With both sides signaling no interest in negotiations, investors and policymakers should watch:

  1. Hormuz shipping data — Any resumption of tanker traffic would immediately ease oil prices
  2. US-Russia diplomatic fallout — Will Washington impose consequences on Moscow for intelligence sharing? Any escalation here could spill into energy markets further
  3. Bank Indonesia's response — The central bank faces a dilemma: defend the rupiah (which means tighter monetary policy) or support growth (which means accepting further currency weakness)
  4. Indonesia's fuel pricing decisions — If oil stays above $90 through Ramadan, the political pressure to raise subsidized fuel prices will become immense
  5. Alternative crude sourcing — Indonesia's government has signaled interest in shifting some oil imports from the Middle East to the US. Speed of execution matters

The war in the Middle East was already Indonesia's most serious external economic shock since the pandemic. Russia's decision to back Iran with intelligence makes it worse — and longer.