JOHANNESBURG – The escalating conflict between Israel and Iran is driving up fuel prices in South Africa, President Cyril Ramaphosa warned Friday, as oil prices have surged more than 20% in June amid fears of broader economic consequences for the country. Speaking at the Constitutional Court’s 30th anniversary celebration, Ramaphosa called for urgent dialogue to resolve the Middle East crisis that began on June 13 when Israel launched a surprise attack on Iranian military and nuclear facilities.
The conflict has sent shockwaves through global energy markets. Brent crude futures settled at $76.45 a barrel Tuesday, up 4.4%, while U.S. West Texas Intermediate futures have surged more than 20% in June. The national average price of a gallon of gas in the U.S. stands at $3.19 per gallon, which marks a 7 cent increase over the past week.
“Dialogue and peacemaking are the only way to solve problems,” Ramaphosa said. “It must happen immediately without resorting to further airstrikes and bombs.” He highlighted the war’s economic toll, noting, “We are already suffering from price rises in our fuel.”
Since the conflict began on June 13, Iranian missile attacks have killed 24 Israelis and wounded over 800. In Israel, 24 civilians have been killed by Iranian missile attacks, according to local authorities, in the worst conflict between the longtime enemies. Meanwhile, more than 220 people have been killed in the Israeli attacks, including at least 70 women and children, according to Iranian authorities.
Bianca Botes, director at Citadel Global, warned that tensions in the Middle East are intensifying. “High-level security meetings and strong public statements have added to the sense of urgency, while both Israel and Iran appear determined to escalate the conflict after several days of hostilities,” she said. The White House said on Thursday that President Donald Trump will decide whether the U.S. will get involved in the Israel-Iran conflict in the next two weeks.
The South African rand was up on Friday, as most emerging markets benefited from easing worries of an immediate U.S. involvement in the Iran-Israel conflict. However, the rand remains under pressure amid a risk-off sentiment, trading at R17.98/$, R20.68/€, and R24.17/£.
“Emerging market assets are under strain as traders weigh both geopolitical risks and uncertainty over future US interest rate moves,” Botes added. The risk of major energy disruption will rise if Iran feels existentially threatened, and U.S. entry into the conflict could trigger direct attacks on tankers and energy infrastructure, warned RBC Capital analyst Helima Croft.
The conflict has already disrupted energy infrastructure. Israel’s Bazan oil refinery complex sustained damage from an Iranian attack earlier this week, while an Israeli airstrike at the South Pars field, the world’s largest gas field, prompted Tehran to partially suspend production. About 18 million to 21 million barrels per day of oil and oil products move through the Strait of Hormuz along Iran’s southern coast, raising concerns about potential supply disruptions.
Before the Minister of Justice Mamoloko Kubayi intervened to redirect questions, Ramaphosa emphasized South Africa’s broader economic vulnerabilities. The country is already grappling with high inflation and unemployment, making it particularly susceptible to external shocks like rising fuel costs.
The Constitutional Court event also sparked discussions on persistent inequalities despite 30 years of democracy. Advocate Tembeka Ngcukaitobi, a former Constitutional Court clerk, praised the court’s work but highlighted ongoing challenges. “The persisting inequalities, the persisting racism, the persisting gender discrimination, all of which were objects that the Constitution sought to undo, remain,” he said.
Market analysts warn that oil prices could surge from a current level of about $73 per barrel up to $120 per barrel if the Israel-Iran conflict damages Iranian oil infrastructure or impedes the passage of some oil tankers in the Strait of Hormuz. “The biggest fear for the oil market is the shutdown of the Strait of Hormuz,” ING analysts said. “Almost a third of global seaborne oil trade moves through this chokepoint. A significant disruption to these flows would be enough to push prices to $120 (a barrel).”
As South Africa braces for potential fuel price increases, the government faces renewed pressure to review its fuel price formula. Currently, administered elements including levies account for between 40% and 60% of the final retail petrol price, according to a South African Reserve Bank report.
