Friction To Fracture: Iran War Breaks Indonesia-Iran Ties

A second diplomatic wound emerged in the defense sphere. During the fifth Multilateral Naval Exercise Komodo (MNEK) in Bali in February 2025, Indonesia reportedly canceled Iran's participation. Two Iranian warships, IRIS Dena and IRIS Shahid Mahdavi, were allegedly instructed to turn back while en route.

Reports of pressure from the US Pentagon to exclude Iran from exercises involving American military assets landed badly in Tehran. For Iranian policymakers, the episode amounted to a diplomatic slight, reinforcing the perception that Jakarta prioritizes strategic alignment with Washington over balanced bilateral relations.

Indonesia's diplomatic ambiguity is apparent in its dual engagement with competing international blocs. On one hand, Jakarta formally joined BRICS in January 2025, a move expected to strengthen ties with Iran as a fellow member of a Western-balancing coalition.

On the other hand, Indonesia actively participates in the Board of Peace (BoP), a multilateral initiative promoted by the Trump administration for Gaza stabilization, which Tehran regards as an extension of Israeli interests.

This dissonance between Indonesia's rhetoric in BRICS and its BoP participation has fostered the impression that it is straddling two camps without firm footing.

The perception gap has been exacerbated by contrasting leadership styles. Following the February 28, 2026, attack that killed Ayatollah Ali Khamenei, the Indonesian government's response was widely seen as technocratic and restrained. An official condolence letter from the president was issued only on March 4, with carefully calibrated language likely drafted to avoid offending the US.

In contrast, former President Megawati Sukarnoputri sent condolences promptly on March 1, adopting a more ideological tone by condemning unilateral aggression and invoking the non-aligned movement spirit of the 1955 Bandung Conference.

The divergence signaled to Tehran that Indonesia's political undercurrents may be more sympathetic than its official posture suggests.

Jakarta's dilemma in dealing with Iran cannot be disentangled from its deepening economic dependence on the US. The signing of the Agreement on Reciprocal Trade (ART) on February 19, 2026, just 10 days before the Hormuz crisis erupted, has no doubt constrained Indonesia's diplomatic flexibility.

While ART grants zero-tariff access for thousands of strategic exports, including textiles and electronics, it effectively binds aspects of Indonesia's economic security policy to Washington's orbit.

Some observers have described the arrangement as a“gilded cage,” where short-term economic gains come at the cost of muted criticism toward US military actions in the Middle East.

Amid the Indonesia-Iran impasse, Malaysia emerged as an unlikely mediator. A three-hour meeting between President Prabowo and Prime Minister Anwar on March 27 proved pivotal: within 24 hours of Malaysia's backchannel intervention, Iran granted the Pertamina tankers safe passage through the Strait of Hormuz.

Yet Indonesia's reliance on a neighboring country to secure the release of critical national assets revealed a troubling breakdown in direct communication between Jakarta and Tehran.

Under the new leadership of Mojtaba Khamenei, appointed on March 9, 2026, Iran appears poised to adopt a firmer stance toward states perceived as ambivalent in their support for the sovereignty of Muslim nations. Unless Indonesia recalibrates its position, its energy security - 20% of which depends on Hormuz transit - will remain exposed to geopolitical volatility.

With Brent crude prices briefly surpassing $120 per barrel, Indonesia's 2026 energy subsidy burden could swell by more than 210 trillion rupiah beyond initial projections. This geoeconomic shock, effectively a“bullet-less strike,” has the potential to derail priority development programs if supply disruptions persist.

Resolving Indonesia's tanker crisis on a durable basis requires steps beyond routine ministerial diplomacy. First, the MT Arman 114 dispute must be addressed at the highest political level.