Bad news about petrol prices in South Africa as Middle East conflict escalates

An escalation in the conflict in the Middle East could substantially increase petrol prices in South Africa over the next few months.

Israel’s recent attacks on Iran, which it described as “preventative” actions to disrupt the latter’s nuclear weapons development programme, resulted in a sharp increase in global oil prices from 13 June 2025.

The US officially entered the conflict with night-time strikes on Iran’s three main nuclear facilities on Saturday, 21 June 2025.

The Iranian Atomic Energy Organisation has labelled the bombings as a “barbaric violation” of international law, but it remains to be seen how the country will respond to the attacks.

The event has reignited fears about the potential fallout from the conflict, which could impact global economic stability and inflation.

In addition to Iran, the Middle East is home to four other top 10 oil producers in the world, including Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait.

The immediate movements of oil prices over the next few days are expected to be primarily based on Iran’s response. Bloomberg Economics believes the country has three options on the table:

• Attack United States personnel and assets in the region.
• Target regional energy infrastructure.
• Close the Strait of Hormuz with underwater mines or ship attacks.

The latter is the worst-case scenario, as roughly a fifth of the world’s daily oil supply comes through the maritime chokepoint.

According to three Bloomberg Economics analysts, the closure of the Strait of Hormuz would see crude oil prices surge over $130 (R2,351) per barrel.

Oilprice.com has gathered feedback from several more analysts who have estimated the wartime price will range between $75 and $78 (R1,356 and R1,410) per barrel as a minimum.

Under extreme supply disruption scenarios, the experts predicted prices to increase to around $90 to $120 (R1,627 to R2,170).

Most of South Africa’s oil is imported from Nigeria and Saudi Arabia. However, the lower overall supply will impact prices broadly.

South Africa’s petrol and diesel price forecasts already gloomy

The latest data from the Central Energy Fund (CEF) pointed to 38-cent and 35-cent increases in the prices of unleaded 95 and 93 petrol, respectively, from July 2025.

Wholesale diesel prices were set for even bigger increases, with a 58-cent hike for 50ppm and a 56-cent increase for 500ppm.

While those were already substantially higher increases than from earlier in the month, they were based on data up to Thursday, 19 June 2025, before the US bombings.

The Brent crude oil price was only around $77 per barrel at that point. As the oil price contributes the biggest part of local petrol prices, the increases could be substantial.

On the positive side, Bloomberg reports that OPEC+ members, including Saudi Arabia, still have ample production capacity that could be activated.

Citi analysts have predicted a more modest 20% increase, with the OPEC countries’ supplies acting as a stabiliser.

The International Energy Agency could also opt to coordinate a release of emergency stockpiles to cool prices.

However, adding to the gloomy outlook in South Africa is the rand weakening against the dollar, the currency in which most oil is sold.

The currencies of developing markets, such as the South African rand, tend to weaken during periods of instability, as foreign exchange traders and investors turn to more stable developed markets.