Global Oil Prices and Rupiah Exchange Rates Do Not Drive Indonesian Energy Stock Returns
FORMOSA NEWS – Fluctuations in global oil prices and the Indonesian rupiah exchange rate against the US dollar do not significantly influence the stock returns of energy companies listed on the Indonesia Stock Exchange (IDX). This conclusion comes from a study conducted by Nidrah and Mufidatul Azmi of Universitas Negeri Makassar (UNM) and published in 2026 in the International Journal of Applied and Advanced Multidisciplinary Research (IJAAMR). The findings suggest that the performance of Indonesian energy stocks is driven more by company fundamentals and domestic energy policies than by global economic turbulence. The study arrives at a time when global energy markets are experiencing heightened uncertainty. Geopolitical conflicts, post-pandemic economic recovery, changes in oil production policies, and currency fluctuations have all contributed to increased volatility in international financial markets. Many investors assume that rising or falling oil prices directly affect the performance of energy-related stocks. However, the latest research from Universitas Negeri Makassar indicates that the Indonesian energy sector does not necessarily follow this assumption.
Global Uncertainty and Indonesia’s Energy Market
Oil remains one of the world’s most strategic commodities. Changes in oil prices often influence production costs, inflation rates, and economic policies across countries. Likewise, movements in the rupiah exchange rate against the US dollar can affect energy companies, particularly those involved in international transactions or carrying foreign currency debt. According to Nidrah and Mufidatul Azmi, Indonesia’s energy sector has unique characteristics that make it less vulnerable to external shocks than many investors might expect. Many energy companies generate revenue in US dollars through export activities, allowing them to offset some of the negative effects of a weakening rupiah. In addition, government intervention and energy-related policies help stabilize the industry against global market fluctuations. To better understand these relationships, the researchers analyzed data from energy companies listed on the Indonesia Stock Exchange between 2021 and 2025.
Analysis of 14 Energy Companies
The study employed a quantitative approach using multiple linear regression analysis. A total of 14 energy sector companies were selected as research samples, including:
-Adaro Energy Indonesia (ADRO)
-AKR Corporindo (AKRA)
-Aneka Tambang (ANTM)
-Elnusa (ELSA)
-Energi Mega Persada (ENRG)
-ESSA Industries Indonesia (ESSA)
-Harum Energy (HRUM)
-Indika Energy (INDY)
-Indo Tambangraya Megah (ITMG)
-Medco Energi Internasional (MEDC)
-Perusahaan Gas Negara (PGAS)
-Bukit Asam (PTBA)
-Timah (TINS)
-TBS Energi Utama (TOBA)
The researchers examined monthly stock price data, global oil price volatility, and the rupiah-US dollar exchange rate over the five-year observation period. Statistical testing was then conducted to determine whether changes in oil prices and exchange rates could explain fluctuations in stock returns within Indonesia’s energy sector.
Key Findings: No Significant Impact
The analysis revealed that neither global oil price volatility nor rupiah exchange rate fluctuations had a statistically significant effect on energy sector stock returns. Some of the key findings include:
-The average stock return in the energy sector was 1.88 percent.
-Average global oil price volatility reached 5.83 percent.
-The average rupiah exchange rate stood at approximately Rp15,420 per US dollar.
-The significance level for oil price volatility was 0.504.
-The significance level for exchange rate fluctuations was 0.863.
-The simultaneous test produced a significance value of 0.755, indicating that both variables jointly had no significant effect.
-The regression model explained only 1.02 percent of the variation in stock returns.
These results indicate that nearly all movements in energy sector stock returns are influenced by factors beyond global oil prices and exchange rates.
Company Fundamentals Matter More
According to the researchers, investors in the Indonesian capital market appear to place greater emphasis on company-specific fundamentals rather than external macroeconomic indicators. Factors such as profitability, operational efficiency, business strategy, corporate governance, and long-term growth prospects play a more important role in shaping investment decisions than short-term fluctuations in oil prices or currency values. The study also found that many Indonesian energy companies possess a natural hedge against foreign exchange risks because a significant portion of their revenue is earned in US dollars. This reduces the potential negative impact of rupiah depreciation on company performance. Furthermore, government policies—including energy subsidies, export regulations, and pricing controls—help cushion energy firms from direct exposure to global commodity price shocks.
What This Means for Investors
The findings provide an important message for investors. While rising oil prices are often assumed to benefit energy stocks, the relationship is not always straightforward in Indonesia. Instead of focusing solely on macroeconomic indicators, investors should pay closer attention to:
-Financial performance
-Profit growth
-Debt structure
-Operational efficiency
-Long-term business strategies
-Compliance with government energy policies
The researchers argue that these factors offer a more reliable basis for evaluating investment opportunities in the Indonesian energy sector.
Implications for Finance and Public Policy
The study offers valuable insights for investors, financial analysts, regulators, and policymakers. It suggests that Indonesia’s energy sector demonstrates a relatively strong level of resilience to short-term global economic shocks. For policymakers, the findings highlight the effectiveness of domestic policies in reducing the transmission of international commodity market volatility to local companies. For investors, the study reinforces the importance of conducting thorough company-level analysis rather than relying exclusively on external economic indicators. Nidrah and Mufidatul Azmi emphasize that the Indonesian capital market remains strongly influenced by domestic conditions, meaning that global economic developments are not always reflected directly in stock prices. As a result, understanding corporate performance and industry-specific dynamics remains essential for making informed investment decisions.
Author Profiles
Nidrah, S.E., M.M. is a lecturer and researcher in the Management Study Program, Faculty of Economics and Business, Universitas Negeri Makassar (UNM). Her expertise includes financial management, capital markets, investment analysis, and corporate performance evaluation.
Mufidatul Azmi is an academic and researcher affiliated with Universitas Negeri Makassar. Her research interests focus on corporate finance, investment, macroeconomics, and the development of Indonesia’s capital markets.
Research Source
Article Title: The Influence of Global Oil Price Volatility and Exchange Rates on Stock Returns in the Energy Sector in Indonesia
Authors: Nidrah and Mufidatul Azmi
Affiliation: Universitas Negeri Makassar (UNM)
Journal: International Journal of Applied and Advanced Multidisciplinary Research (IJAAMR)
Volume and Issue: Vol. 4, No. 5
Year: 2026
0 Komentar