{"id":853307,"date":"2026-03-09T11:07:32","date_gmt":"2026-03-09T09:07:32","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=853307"},"modified":"2026-03-09T11:07:35","modified_gmt":"2026-03-09T09:07:35","slug":"double-disaster-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/853307\/double-disaster-for-south-africa\/","title":{"rendered":"Double disaster for South Africa"},"content":{"rendered":"\n

Global oil prices hit over $110 a barrel for the first time since 2022, drawing fears of another global inflation crisis echoing the fallout of Russia’s invasion of Ukraine.<\/p>\n\n\n\n

Coupled with the sharp rise in oil prices, the rand has weakened significantly, marching back towards R17\/$ amid a wider emerging market selloff.<\/p>\n\n\n\n

Brent crude futures settled at above $114 on Monday, 9 March 2026, after trading as high as $119. Prices had already pushed above $110 on Sunday, 8 March.<\/p>\n\n\n\n

By mid-morning trade (South African time), prices had eased slightly to around $107 a barrel, but markets remain volatile, with some steep fluctuations.<\/p>\n\n\n\n

The price jumps reflect market panic and pricing in a disruption around the Strait of Hormuz as a result of the United States\/Israel war in Iran.<\/p>\n\n\n\n

The US and Israel bombed Iran on 28 February 2026, killing its Supreme Leader and many high-ups.<\/p>\n\n\n\n

In the week since the attack, Iran has retaliated by striking US operations in its neighbouring countries, leading to further attacks on the nation.<\/p>\n\n\n\n

In the latest development, Iran has named Mojtaba Khamenei, the son of the late Iranian supreme leader Ali Khamenei, killed by the US attacks, as its new Supreme Leader.<\/p>\n\n\n\n

The escalation of the war in the Middle East places the Strait of Hormuz into focus.<\/p>\n\n\n\n

The strait is one of the world’s most crucial energy chokepoints, where an average of about 20 million barrels per day is shipped through.<\/p>\n\n\n\n

This is roughly 20% of global petroleum liquids consumption, according to the US Energy Information Administration (EIA).<\/p>\n\n\n\n

While some economists and analysts believe the oil price surge will be short-lived, others warn that prices could hit $150 a barrel, with the Strait of Hormuz a decisive factor.<\/p>\n\n\n\n

According to the EBC Financial Group, for oil prices to reach $150, it would require conditions harsher than those the market has currently confirmed.<\/p>\n\n\n\n

This would include a prolonged, effective blockage of Hormuz flows and meaningful production outages across multiple Gulf producers.<\/p>\n\n\n\n

Goldman Sachs predicts that oil prices could reach $150 if disruptions persist and supply flows remain significantly restricted.<\/p>\n\n\n\n

However, even if prices do not reach $150, at $110, South Africans will still suffer.<\/p>\n\n\n\n

Petrol, inflation and interest rates<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Oil prices rising above $110 matter to South Africa because higher global crude prices will feed into local fuel costs, transport expenses, and inflation.<\/p>\n\n\n\n

“For households, that can mean more pressure on daily living costs. For markets, it matters because a weaker rand can make imported oil even more expensive, increasing the risk that global energy shocks turn into domestic inflation pressure,” EBC said.<\/p>\n\n\n\n

The first and hardest point of impact for South Africa will be in fuel prices, where recoveries are pushing deeper into the red every day.<\/p>\n\n\n\n

The latest data from the Central Energy Fund (CEF) shows that petrol price recoveries have deepened further into under-recovery, now sitting between R2.60 and R2.80 per litre.<\/p>\n\n\n\n

For diesel\u2014the most common fuel type used by industry\u2014these under-recoveries are sitting at alarming levels, around R5.00 a litre. <\/p>\n\n\n\n

Those who rely on illuminating paraffin are facing an under-recovery of R7.00 per litre.<\/p>\n\n\n\n

While there are still three weeks ahead for stability to return to markets, indications are that things will not settle any time soon.<\/p>\n\n\n\n

A massive hike to fuel prices will deliver a crushing blow to motorists and to businesses and entire industries\u2014the latter of which will likely filter through to higher prices for goods and services.<\/p>\n\n\n\n

This, in turn, will push inflation higher, which will spark alarm with the Reserve Bank’s Monetary Policy Committee (MPC) and impact interest rate cuts.<\/p>\n\n\n\n

The likely 25-basis-point cut initially expected at the SARB’s March meeting has already been scratched out by forecasters, with the baseline expectation now a hold.<\/p>\n\n\n\n

However, traders are already pricing in the possibility of a rate hike due to the turmoil. While this is not an expected view, the longer the war drags on\u2014and markets a disrupted\u2014the more likely it becomes.<\/p>\n\n\n\n

“A price shock, from oil, food or both, would likely be looked through by the MPC if short-lived, and without second-round effects flowing into other prices, leaving interest rates unchanged,” said Investec Chief Economist, Annabel Bishop\/<\/p>\n\n\n\n

“The MPC will watch to see if the impact of higher oil prices on inflation is temporary, or is embedded\u2014becomes permanent\u2014changing interest rates to prevent a more permanent move away from the 3.0% y\/y inflation target.”<\/p>\n","protected":false},"excerpt":{"rendered":"

Oil prices have spiked and the rand is marching back toward R17\/$ as the United States’ war in Iran rattles markets.<\/p>\n","protected":false},"author":10,"featured_media":853320,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[19853,24970,2835,3670],"class_list":["post-853307","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-annabel-bishop","tag-ebc-financial-group","tag-oil","tag-rand"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=853307"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853307\/revisions"}],"predecessor-version":[{"id":853321,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853307\/revisions\/853321"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/853320"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=853307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=853307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=853307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}