Global oil prices have extended recent gains amid renewed geopolitical tensions involving Iran and fears of escalation in the Middle East. Markets are reacting to concerns over potential supply disruptions and the security of key shipping routes, including the Strait of Hormuz.
Energy security and geopolitical analyst Tshepo Kgadima has cautioned against reading too much into the current spike, saying the situation is being driven by short-term panic rather than a sustained structural shock.
Speaking to VOC News, Kgadima said he expects tensions in the region to ease relatively quickly, particularly around the Strait of Hormuz, a critical global oil transit route.
“I think this is being oversimplified. I also believe that by that time the tensions would be over and the Strait of Hormuz would be open. It is in the interest of all parties on either side to have the Strait of Hormuz open,” Kgadima said.
He argued that the broader issue lies not in global oil availability, but in South Africa’s domestic energy structure and dependence on imported refined products.
“What happens to us in South Africa is more important than what happens in the United States. We import 60% of our refined petroleum products. The real problem is not crude supply, it is refining capacity,” Kgadima said.
Kgadima warned that sustained high fuel prices are already feeding through into transport, food, and industrial costs, with limited room for government to shield consumers.
“The question is whether this economy can function at 40 rand a litre. Industrial input costs, agriculture, mining and transport are all under severe pressure,” he said.
He further pointed to South Africa’s reduced refining capacity and reliance on imports as a key structural weakness, saying previous opportunities to strengthen strategic fuel reserves and local refining were not fully utilised, leaving the economy exposed during periods of global volatility
Photo: Sourced
