The war on Iran carries profound geopolitical risks, including the danger of wider regional or global involvement, as already evident through attacks on the Middle East, along with trade disruptions that could weigh on the global economy.
Iran has reportedly shut down the Strait of Hormuz in response to military strikes. The narrow outlet from the Persian Gulf carries roughly 20% of global oil supplies, or about 20 million barrels per day, making it the world’s most important energy choke point, according to an analysis by Dr Sarah Schiffling, deputy director of the Humanitarian Logistics and Supply Chain Management Research Institute at Hanken School of Economics in Finland, published by The Conversation.
In addition, about one-third of global fertiliser trade passes through the strait. Therefore, disruption in the region has the potential to affect fertiliser availability and pricing at a time when agricultural supply chains are still recovering from the war in Ukraine.
Schiffling noted that even countries that do not source oil directly from the Gulf will feel the impact, as energy is globally traded and priced, and higher oil and gas costs feed directly into fertiliser production, consequently raising crop input prices.
“The longer the disruption persists, the more significant and structural the economic damage will become,” she warned.
Domestic impact
For South African farmers already grappling with volatile input costs and currency fluctuations, prolonged instability in the Gulf could translate into renewed pressure on margins.
Dawie Maree, head of agriculture information and marketing at FNB, told Farmer’s Weekly that South Africa’s limited direct trade with Iran means the immediate impact on exports and imports is unlikely to be severe.
He added that the closure of Hormuz is expected to push up oil prices, which would, in turn, affect fuel prices.
“Following the military strike [on Iran], we saw a sharp spike in the oil price, which has since fallen to about US$78 per barrel. The market, however, had priced in the potential of an attack before it happened, which has helped to soften the shock,” Maree explained.
He added that a bigger concern is a long-term disruption rather than a short-term one.
Shipping routes are also being affected. “Shipping liners have had to divert their routes because of the closure of the Strait of Hormuz, with some even avoiding the Suez Canal due to the instability. This could result in more ships trading via South Africa, which would be advantageous to South Africa, but it would also drive up shipping costs, which would drive [up] the cost of inputs and trade,” Maree explained.
Fuel prices
The Central Energy Fund (CEF) reported an under‑recovery in fuel prices in February 2026. Petrol was about 20 c/ℓ below the cost‑recovery level for unleaded and lead‑replacement petrol, diesel rose by 62 c/ℓ and 65 c/ℓ for 0,05 % and 0,005 % sulphur grades, respectively, and illuminating paraffin was under‑recovered by 44 c/ℓ at wholesale and 58 c/ℓ at the single maximum national retail price, the CEF said in a press release.
The increases were largely driven by movements in international oil prices, resulting in under‑recoveries of 37,5 c/ℓ for petrol and 81,4 c/ℓ and 84,4 c/ℓ for the two diesel grades. The impact was softened somewhat by the rand’s appreciation against the US dollar, with the average rand/USD exchange rate for 30 January to 26 February 2026 at 15,9996, compared with 16,3054 during the previous period.
Gavin Kelly, CEO of the Road Freight Association, said in a statement that the rise in fuel prices was a direct result of upward pressure on the international price of oil due to supply and logistics risks after clashes erupted between Iran and the US and Israel.
He was particularly concerned about the diesel prices increasing by 60c/ℓ and 65c/ℓ, respectively, as diesel is the primary fuel source for most medium and heavy commercial transporters.
“Transporters will have to factor this increase, and any others that may arise, into their pricing. The gains achieved through gradual fuel price reductions in 2025 will effectively be erased, and consumers will inevitably begin to feel this change in increasing prices at the till,” he explained.
He added that the general economy will not be immune, with rising oil prices exerting upward pressure on inflation and affecting future decisions on the repo rate and the value of the rand in the pockets of ordinary South Africans.
