Sofia, Bulgaria – A coordinated military operation between the United States and Israel has resulted in strikes across Iran, escalating tensions in the Middle East and sending ripples through global markets. The attacks, which began on Saturday, February 28, 2026, targeted multiple locations including the capital, Tehran, according to reports from Al Jazeera and other international news outlets. This latest escalation follows weeks of mounting threats from U.S. President Donald Trump and comes just eight months after a 12-day conflict between the U.S., Israel, and Iran. The immediate impact has been felt in financial markets, with concerns mounting over potential disruptions to oil supplies and broader economic instability. The Indonesian Composite Index (IHSG) is already showing signs of vulnerability, as detailed in reports from Indonesian financial news sources.
The U.S. President described the actions as “major combat operations,” while Israel’s Prime Minister Benjamin Netanyahu stated the operation was a joint effort to address threats emanating from Iran. Details regarding the specific targets within Iran remain limited, but initial reports indicate strikes aimed at infrastructure and potentially military facilities. Iran has responded with missile launches targeting northern Israel and U.S. Military bases in the region, further intensifying the conflict. Casualty and damage assessments are currently sparse, hindering a full understanding of the immediate consequences. The situation is highly fluid, and diplomatic efforts to de-escalate the crisis are reportedly ongoing, though their prospects remain uncertain.
Escalation of Tensions and Regional Response
The attacks represent a significant escalation in the long-running tensions between Iran and the U.S. And Israel. These tensions have been fueled by Iran’s nuclear program and its ballistic missile development, as well as its regional influence. Negotiations between the U.S. And Iran over these issues were underway prior to the strikes, but have now been thrown into jeopardy. The timing of the attacks, amidst these negotiations, has raised questions about the U.S. Administration’s commitment to a diplomatic resolution.
Reports from the region indicate that explosions were heard in Tehran, with videos circulating on social media showing smoke rising from various parts of the city. Al Jazeera’s correspondent in western Tehran reported hearing two explosions. Simultaneously, explosions were also reported in Abu Dhabi, the capital of the United Arab Emirates, and Dubai, both key allies of the United States and significant oil producers. These reports suggest a broader regional impact beyond direct Iranian and Israeli targets.
Impact on Indonesian Markets: IHSG Vulnerability
The escalating conflict in the Middle East is already impacting global financial markets, and Indonesia’s IHSG is not immune. According to reports from Indonesian news outlets, including Kompas.com and DetikNews, the attacks are expected to have a negative effect on the index. The primary concern is the potential for increased oil prices, which would impact Indonesia’s economy, a net importer of oil.
Market analysts, such as Wahyu Laksono, have warned of a potentially sharp downturn in the IHSG if the situation does not de-escalate quickly. Laksono stated that the current conflict is more serious than previous tensions between Iran and Israel, due to the direct involvement of the United States and the readiness of its allies to engage. He predicted a potentially severe impact on Monday, March 2, 2026, affecting Wall Street and global stock markets alongside the IHSG.
Data from the Indonesia Stock Exchange (BEI) indicates that trading during the week of February 23-27, 2026, was varied. According to BEI Secretary Kautsar Primadi Nurahmad, the average daily transaction value increased by 25.35 percent, reaching Rp29.52 trillion from Rp23.89 trillion the previous week. Average daily trading volume also rose by 8.55 percent to 51.02 billion shares. However, the IHSG itself experienced a decline of 0.44 percent, closing at 8,235.485, down from 8,271.767 the previous week. Market capitalization decreased by 1.03 percent to Rp14,787 trillion from Rp14,941 trillion.
Foreign Investor Sentiment
The Indonesian stock market has also seen a trend of net selling by foreign investors. On Friday, February 27, 2026, foreign investors recorded net sales of Rp694.22 billion. Throughout 2026, cumulative net sales by foreign investors totaled Rp9.51 trillion, indicating a cautious outlook among international investors. This trend suggests a sensitivity to geopolitical risks and a potential flight to safer assets in times of uncertainty.
International Reactions and Diplomatic Efforts
The attacks have drawn condemnation from various international actors, while others have expressed support for Israel’s right to defend itself. The United Nations Security Council is expected to convene an emergency session to discuss the situation and explore potential avenues for de-escalation. The European Union has called for restraint from all parties and urged a return to diplomatic negotiations. The role of regional powers, such as Saudi Arabia and Egypt, will be crucial in mediating a resolution to the conflict.
The reported targeting of Ayatollah Ali Khamenei and President Masoud Pezeshkian, though unconfirmed regarding their presence at the locations struck, underscores the severity of the escalation. Reuters reported, through a source familiar with the matter, that Khamenei had been moved to a safe location prior to the attacks. This suggests a level of preparedness on the part of Iranian leadership, but also highlights the potential for further retaliatory actions.
Oil Market Implications
The conflict’s impact on oil prices is a major concern for global markets. The Middle East is a critical region for oil production, and any disruption to supply could lead to significant price increases. This would have a cascading effect on economies worldwide, contributing to inflation and potentially slowing economic growth. The International Energy Agency (IEA) is closely monitoring the situation and assessing the potential impact on oil markets.
The attacks also raise concerns about the security of shipping lanes in the Persian Gulf, a vital artery for global oil trade. Any disruption to these shipping lanes could further exacerbate the situation and lead to even higher oil prices.
Looking Ahead: Monitoring the Situation
The situation remains highly volatile and unpredictable. The immediate focus will be on monitoring the extent of the damage and casualties in Iran, as well as assessing the potential for further escalation. The response from Iran will be critical in determining the trajectory of the conflict. Diplomatic efforts to de-escalate the situation will continue, but their success is far from guaranteed.
Investors in Indonesia and around the world will be closely watching developments in the Middle East and assessing the potential impact on their portfolios. The IHSG is likely to remain sensitive to geopolitical risks in the coming days and weeks. The next key checkpoint will be the outcome of the United Nations Security Council emergency session and any further statements from the U.S. And Iranian governments.
We encourage readers to share their thoughts and perspectives on this developing situation in the comments below. Stay tuned to World Today Journal for continued coverage and analysis of this critical global event.