Experts: South Africa vulnerable to market shocks caused by Middle East conflict

South Africa is bracing for impacts caused by the war between Iran, the United States and Israel in the Middle East — resulting in rising energy prices, logistics and trade disruptions, among others.

Raymond Parsons, a lecturer at South Africa's North-West University Business School, said the energy shock from the Middle East conflict "immediately raises red flags" for the economic outlook of many countries, although some economies are more vulnerable than others.

"Western Cape exporters and the agricultural sector are already reporting logistical disruptions and rising input costs as a result of the Middle East war," Parsons said.

The latest Cargo Movement update by the Southern African Association of Freight Forwarders said the shipping sector is facing a pronounced cost-push as expenses rise sharply across several areas.

The report noted that bunker fuel prices are surging in line with global oil market volatility, while elevated war-risk premiums and conflict-related surcharges are increasingly being passed on to the landed costs of both imports and exports.

It also highlighted growing capacity constraints, as longer voyage distances and schedule disruptions reduce effective global shipping capacity and increase inventory risks for traders.

Dawie Roodt, a South African economist, said two domestic vulnerabilities could worsen the impact in South Africa: reduced refinery capacity and uncertainty over the country's strategic fuel reserves.

He noted that the country is increasingly dependent on imported refined products, such as diesel, which is currently in short supply globally.

According to South Africa's Cape Chamber of Commerce and Industry, diesel — which powers most of South Africa's land-based freight transport — rose by between 62 and 65 cents per liter, translating to a more than 3 percent increase.

Parsons explained that the International Monetary Fund uses "rule of thumb", suggesting that an oil price of $100 per barrel could shave about 0.4 percent off global growth while adding about 1.2 percent to global inflation.

"Vulnerable economies on the energy front range from the EU to Thailand and South Africa," Parsons said, noting that South Africa is a net importer of petroleum, with much of it sourced from the United Arab Emirates and India.

The impact, he said, will depend on which economies are large energy importers, how long the conflict lasts, and how long oil prices remain high. He warned that if the war persists, fuel prices could continue to rise and affect South Africa and other countries.

"With the present combination of a weakening rand against the dollar — together with higher oil prices — the risks to fuel prices for South Africa in the near future are therefore firmly on the upside, Roodt said. "These outcomes will have negative implications for inflation, growth, and business confidence."

The South Africa Department of Mineral Resources and Energy said in a statement on Tuesday night that it is "closely monitoring developments" in the Middle East and their possible effect on global oil markets and fuel prices.

"Unfortunately, the continued rise in international crude oil prices is expected to result in higher fuel prices at the pump from April 2026," the department said.

The department added that oil companies importing refined petroleum products from countries affected by the conflict are exploring alternative supply sources to ensure uninterrupted fuel availability in the domestic market.

Thembisa Fakude, director at Africa-Asia Dialogues — an intellectual think tank on geopolitics in South Africa — said the disruption of the Strait of Hormuz would have a "ripple effect" on South Africa and other countries.

He noted that South Africa trades extensively with Gulf countries and that the conflict is already affecting the movement of goods.

"We are one of the major investors in Iran. Whatever happens in Iran is likely to impact us one way or the other," Fakude said, adding that South African exporters supplying fresh produce to Gulf markets could also face disruptions.

A report by Southern African Association of Freight Forwarders said increased vessel traffic around the Cape of Good Hope — due to disruptions of sea routs in the Middle East — is unlikely to generate significant economic gains due to limited supply of value-added services.

"In essence, South Africa will experience the same inflationary logistics shock as the rest of the world, without necessarily capturing proportional upside from the traffic diversion," the report said.

Meanwhile, Maarten van Doesburgh, head of economics at the Cape Peninsula University of Technology, said the biggest risks for South Africa could ultimately be geopolitical, rather than purely economic.

"If tensions between Iran and Western powers intensify, South Africa's diplomatic alignment could come under closer scrutiny from key trading partners in Europe and North America," Van Doesburgh said. "That matters because South Africa's economy remains deeply integrated with Western markets and financial systems."

Edith Mutethya in Nairobi, Kenya contributed to this story.