The escalating conflict in the Middle East could substantially increase petrol prices in South Africa for the foreseeable future.
Israel’s recent attacks on Iran, which it described as “preventative measures” to disrupt Iran’s nuclear weapons development programme, resulted in a steep increase in global oil prices on 13 June 2025.
The situation has since been compounded by the United States, which recently joined the conflict when it carried out multiple airstrikes against three of Iran’s main nuclear facilities on Saturday, 21 June.
Iran’s Atomic Energy Organisation condemned the bombings, describing it as a “barbaric violation” of international law.
Iran subsequently launched counterattacks at both Israel and America by firing missiles at Israel and a US air base near Qatar, according to The Wall Street Journal.
US President Donald Trump has since announced that a ceasefire has come into effect, though Israel has yet to declare its position on the matter.
Iranian Foreign Minister Abbas Araghchi stated that his country would halt its attacks so long as Israel does the same.
The ongoing conflict, which is developing by the hour, has reignited fears about the wider fallout that could impact global economic stability and inflation.
Besides Iran, the Middle East is home to four of the world’s top 10 oil producing nations, including Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait.
A report by Bloomberg Economics speculated that Iran has three courses of action it could pursue:
- Target regional energy infrastructure
- Continue its attacks on US personnel and assets in the region
- Close the Strait of Hormuz with underwater mines or ship attacks
The Strait of Hormuz refers to the sea passage between Iran and the tip of Oman, which is a crucial channel responsible for roughly a fifth of the world’s daily oil shipments.
Shutting it down would therefore be catastrophic for global oil prices, with a barrel of crude potentially jumping to over $130 (R2,311).
For context, oil was trading for $68 per barrel prior to Israel’s attack on Iran on 12 June.
A more optimistic evaluation by Oilprice.com indicated that prices will range between $75 and $78 per barrel, provided the conflict does not disrupt supply any further.
South Africa imports most of its oil from Nigeria and Saudi Arabia, though a significant impact on the overall supply will impact prices globally.
Not looking good in July
The volatile situation in the Middle East has not been kind on South Africa’s expected petrol price for July.
Earlier this month, the Central Energy Fund (CEF) estimated that motorists would experience minor savings in July, but these figures have since been readjusted multiple times following Israel and Iran’s attacks.
At the end of week three, the CEF’s projected price adjustments were as follows:
- Petrol 93 – Increase of 35c per litre
- Petrol 95 – Increase of 38c per litre
- Diesel 0.05% – Increase of 56c per litre
- Diesel 0.005% – Increase of 58c per litre
It’s important to note these figures were calculated before the US bombed Iran’s nuclear facilities over the weekend.
The silver lining is that OPEC+ members such as Saudi Arabia have ample oil production capacity that could be activated in the event global supply is impacted by the conflict.
Of course, oil prices are not the only factor that will affect July’s fuel adjustments, as the value of the rand will determine how expensive it is to import oil.
The good news is that the rand appreciated against the US dollar over the last week, improving from R18.00 to R17.74 per dollar, which could reduce the impact of the fuel increases next month.
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