Economist Frank Blackmore says South Africans could soon feel the impact of rising oil prices following the closure of the Strait of Hormuz.
Speaking to VOC News, Blackmore said the blockage of the strategic shipping route is already rattling global markets.
“It’s a worrisome situation. About 20% of the world’s seaborne oil moves through that narrow passage, and many tankers are currently unable to pass,” he explained.
He added that the strait is also key to global liquefied natural gas supplies and fertiliser inputs.
“Around a third of global urea exports pass through that region. If fertiliser prices rise, food prices will eventually follow,” he said.
Blackmore noted that Brent crude has surged from roughly 68 dollars to about 81 dollars per barrel, an increase of nearly 19 per cent. At the same time, the rand has weakened against the dollar.
“If these levels hold for the rest of the month, motorists could see an increase of around R1.80 per litre, which translates to roughly a 9 per cent hike,” he said.
He warned that transportation, agriculture, mining, and construction would be particularly vulnerable.
“Everything in the economy depends on fuel to move goods and services. The longer this continues, the stronger the inflationary pressure will be,” Blackmore told VOC News.
While some vessels may reroute around Africa’s southern tip, he said, any benefit to South Africa would be limited.
“Any small gain from increased shipping traffic would be outweighed by the broader economic impact,” he added.
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