South Africa may soon face significantly higher petrol prices due to mounting tensions in the Middle East. The conflict escalated following recent airstrikes by Israel targeting Iranian nuclear facilities—an act Israel termed “preventative” against nuclear weapons development. The attacks, which occurred on 13 June 2025, caused a notable spike in global oil prices.
Further intensifying the situation, the United States joined the conflict by launching coordinated strikes on Iran’s three main nuclear sites on Saturday, 21 June 2025. These developments have added immense pressure on oil markets and raised alarms over potential global economic and energy instability.
Iran’s Atomic Energy Organisation described the bombings as a “barbaric violation” of international law. The international community now watches closely to see how Iran might respond.
ALSO READ: Fuel Price Relief in South Africa: Petrol and Diesel Drop Sharply Year-on-Year
Why the Middle East Conflict Matters to Oil Prices
The Middle East is home to several of the world’s largest oil producers, including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, and Iran. Any disruption in the region could have serious consequences for the global oil supply chain.
Potential Iranian Responses That Could Impact Oil Supply
According to Bloomberg Economics, Iran could respond in one of three ways:
- Launching attacks on US personnel or assets in the region
- Targeting critical energy infrastructure in neighboring countries
- Closing the Strait of Hormuz—an essential maritime route for global oil shipments
The closure of the Strait of Hormuz is considered the worst-case scenario. About 20% of the world’s daily oil supply passes through this chokepoint. Any disruption here could drastically impact global fuel availability and prices.
Bloomberg analysts estimate that closing the Strait could push oil prices above $130 (R2,351) per barrel. Other forecasts suggest wartime prices may fluctuate between $75 and $120 (R1,356 to R2,170) depending on how the conflict evolves.
How the Conflict Could Affect South African Petrol Prices
Although South Africa imports much of its crude oil from Nigeria and Saudi Arabia, disruptions in global supply due to the Middle East conflict could drive up prices domestically. The local market is not immune to global oil trends, and any reduction in global supply affects prices across the board.
CEF Data Already Points to Increases in July 2025
Before the US military intervention on 21 June 2025, the Central Energy Fund (CEF) already predicted fuel price hikes for July:
- Unleaded 95 petrol: 38 cents per litre increase
- Unleaded 93 petrol: 35 cents per litre increase
- Diesel (50ppm): 58 cents per litre increase
- Diesel (500ppm): 56 cents per litre increase
These figures were calculated based on oil prices around $77 per barrel, prior to the latest escalation. Should oil prices continue to rise due to the worsening conflict, actual price hikes in July may surpass initial projections.
Global Capacity and Mitigation Strategies
Despite the grim outlook, there are some buffers that may help stabilise global supply and pricing:
- OPEC+ Production Capacity: Countries like Saudi Arabia still have untapped oil production capacity that can be brought online to stabilise prices.
- Emergency Reserves: The International Energy Agency (IEA) could coordinate the release of emergency oil stockpiles to counteract sudden shortages.
- Modest Forecasts: Citi analysts suggest a more moderate price increase of about 20%, assuming OPEC+ countries intervene effectively.
Impact of the Rand-Dollar Exchange Rate
A further complication for South Africa is the weakening rand. Since global oil transactions are typically conducted in US dollars, a weaker rand means consumers will pay more for petrol even if the price of oil stabilises. Historically, during geopolitical instability, investors pull capital from emerging markets, putting additional pressure on currencies like the rand.
FAQs
How much of South Africa’s oil comes from the Middle East?
South Africa imports oil primarily from Nigeria and Saudi Arabia. However, price changes in the Middle East still affect global supply and costs.
Why is the Strait of Hormuz so important?
About 20% of the world’s daily oil supply passes through the Strait of Hormuz, making it a critical route for global energy distribution.
How does a weaker rand affect petrol prices?
When the rand weakens against the US dollar, South Africa must pay more in local currency for oil, increasing petrol prices even if oil prices remain steady globally.
What is OPEC+ and how can it help?
OPEC+ is a coalition of oil-producing nations that coordinates output levels. Countries like Saudi Arabia within this group can increase production to help offset shortages and stabilise prices.
Conclusion
The current geopolitical crisis in the Middle East poses a serious risk to global oil supply and pricing, with direct implications for South African motorists. The local fuel price increases already predicted for July 2025 could worsen if oil prices continue to climb due to escalating tensions or disruptions like the potential closure of the Strait of Hormuz.
Although emergency reserves and additional production capacity from OPEC+ offer some hope, South Africa remains vulnerable due to its reliance on imports and the rand’s depreciation. Consumers should prepare for higher fuel prices in the coming months as the global energy landscape responds to one of its most severe disruptions in years.
