Economy, fiscus, and maritime landscape under pressure

How the global energy shock is reshaping South Africa

Blog
4 minute read
March 12, 2026

This briefing will be updated as key watch points evolve. Readers are encouraged to monitor the triggers identified in Section 5.

Why this matters for your business

The US-Israeli military action against Iran, initiated on 28 February 2026, has triggered the most significant global energy disruption since the 2022 Russia-Ukraine conflict. In the days that followed, Brent crude surged, breaking above $119/barrel in early March after starting at just $73/barrel. The Strait of Hormuz—through which roughly one-fifth of global oil supply transits—has effectively ceased commercial operations following the withdrawal of P&I insurance cover. Major shipping lines including Maersk, MSC, CMA CGM, and Hapag-Lloyd have suspended both Hormuz and Red Sea/Suez operations.

South Africa's exposure is more complex and differentiated than that of most emerging markets. It faces the same imported inflation pressures as any net oil importer, but it also benefits from a record commodity price windfall and an activated maritime corridor. Whether those advantages convert into real economic gains depends on operational capacity—and on the speed of policy response.

This briefing sets out the transmission channels, the scenario framework, and the specific watch points that will determine which scenario materialises. It is intended as a durable reference document: the analytical structure remains valid across all plausible conflict trajectories.

1. South Africa's pre-shock economic position

Macro context

South Africa’s macroeconomic conditions were relatively stable before the shock hit. In January 2026, consumer price inflation was 3.5%—higher than the South African Reserve Bank's (SARB’s) new target of 3.0% but within the 1 percentage point tolerance band. ¹

The rand was trading at around R15.99/$ in February 2026, bolstered by improved current account dynamics and positive sentiment around Budget 2026, as well as increased commodity prices especially gold and platinum group metals (PGMs).

The SARB had been gradually lowering interest rates after successfully reducing inflation during 2024–25. However, at its January 2026 meeting, the Monetary Policy Committee (MPC) voted four-to-two to keep the repo rate unchanged at 6.75%, signalling a more cautious approach. ² That context has now deteriorated significantly. The rand has depreciated to approximately R16.85/$—its weakest level since mid-December 2025—before recovering slightly to around R16.30/$.

Fuel prices are rising sharply. On 4 March, inland 93-octane petrol prices increased to R20.19/litre (95-octane at R20.30/litre), up 20c/litre increase from February. However, this increase reflects only a partial pass-through of pre-conflict oil prices, as increased levies will only come through in the April fuel price adjustment. ³

As such, the April fuel price adjustment will be far more severe. It will be the first to fully capture oil prices above $100 per barrel, combined with legislated levy increases taking effect on 1 April:

General Fuel Levy: +9c/litre for petrol (+8c for diesel)

Carbon Fuel Levy: Increasing to 19c/litre for petrol (from 14c) and 23c/litre for diesel (from 17c)

Road Accident Fund Levy: +7c/litre⁴

As of 5 March, Central Energy Fund data shows under-recoveries of approximately 378c/litre for 95-octane and 357c/litre for 93-octane—indicating that an exceptionally large April price increase is imminent. ³

Fiscal context

Budget 2026/27, delivered 25 February 2026, projects main tax revenue of R2.08tn for 2026/27, up from gross tax revenue collections of R1.98tn in 2025/26—an overrun of R28.8bn against the 2025 budget estimate.⁴ based on this improved performance, the R20bn tax increase previously planned for the 2026 Budget was withdrawn.

Mining-related tax collections contributed significantly to the revenue overrun. Higher platinum group metals (PGMs) and gold prices drove strong provisional tax collections from mining companies in December 2025.⁵ This is significant: gold and PGMs represent approximately 40% of SA mining output, creating substantial upside exposure to the commodity cycle now underway.

The fiscal position has improved. The primary surplus has been achieved, and gross loan debt is projected to stabilise at 78.9% of GDP in 2025/26 before declining thereafter. The contingency reserve stands at R32.6bn over the three-year Medium-Term Expenditure Framework (MTEF) period. ⁴

2. How the shock transmits to South Africa

South Africa faces the shock through six simultaneous channels. The first two are negative; the next two are positive but lagged; the fifth and sixth are policy-contingent.

March inland 93-octane petrol is confirmed at R20.19/litre. The April adjustment will compound this with legislated levies and a Brent price approximately 35–40% above the March calculation baseline. At current exchange rates, a sustained oil price above $108/barrel implies a further R3.50–R5.00/litre increase from the February baseline. CEF under-recovery data suggests the April increase could be substantially larger. ³

Fuel carries just under 4% weight in the CPI basket, but the larger inflation driver is indirect: transport costs flow through to food, logistics and manufactured goods. Diesel is particularly significant given South Africa's road freight dependency. The SARB faces a meaningful shift in its rate outlook—from a potential cut prior to the conflict to the possibility of a 25bp hike at the 26 March MPC meeting. ²

Gold is trading at $5,100–$5,200/oz, with major bank year-end targets ranging from Goldman Sachs at $5,400 to JPMorgan at $6,300. PGM and coal prices have also firmed. Higher commodity prices flow to mining profitability and then to corporate income tax, royalties, and dividend withholding tax—but the revenue arrives after the expenditure pressure peaks.

The rand's depreciation amplifies the fuel shock through the basic fuel price formula. Further weakness is plausible if the conflict deepens or if global risk appetite deteriorates. R17.50–R19.00 is the central scenario range under prolonged Hormuz disruption.

With both Hormuz and the Red Sea/Suez simultaneously compromised—for the first time in modern shipping history—the Cape route is the world's only viable major east-west maritime corridor. All major carriers have rerouted accordingly. Early signals from Transnet National Ports Authority (TNPA) indicate bunkering upticks at Durban and Cape Town, but no surge in port calls has yet materialised. Critically, South Africa failed to capture the maritime opportunity during the 2024 Red Sea crisis—IBIA data show that South African bunker volumes fell from approximately 130,000 metric tonnes per month in 2023 to approximately 80,000 metric tonnes per month in Q1 2024, largely due to the SARS-enforced shutdown of offshore bunkering at Algoa Bay, while Mauritius doubled its bunkering volumes and Walvis Bay reported similar demand increases.⁶ The same bottlenecks remain: insufficient dedicated bunker berths, tax legislation preventing duty-free MGO export sales at Durban, and poor port efficiency.

Higher prices for commodities exported via rail and ports are only realisable if export volumes hold. Transnet's port and rail operational capacity remains the binding constraint on commodity export revenue—and that constraint is unchanged by the conflict.

3. Scenario framework

The scenario framework below is intended to remain useful as the conflict evolves. The key variable is not oil price alone, but the duration of Hormuz disruption and the diplomatic trajectory.

This is the current trajectory and most relevant planning horizon. Brent crude sustains in the $100–$120 range as some de-escalation from the current (at time of writing) $100+ level occurs, but Hormuz access remains compromised.

Inland 95-octane petrol reaches R22.50–R24.00/litre through Q2/Q3. CPI accelerates to 5.0–5.8% by Q3; food inflation 6–7%. The rand trades in the R17.50–R19.00 range. GDP growth runs 0.5–1.0 percentage points below the Budget baseline of 1.6%. ⁴

The fiscal net position is broadly neutral, but with a critical timing mismatch: oil shock costs arrive Q2/Q3 2026 while commodity revenue uplift lands in the 2026/27–2027/28 tax years. This is the most actionable scenario for the Cape route—durable enough to justify the regulatory and operational fixes that are immediately executable.

This scenario is triggered by a credible ceasefire or diplomatic framework within two to four weeks. Brent crude retreats toward $80–$85/barrel, then toward $68–$72 by end-April.

CPI peaks at approximately 4.0–4.2% in Q2 before reverting toward target. The rand stabilises. The SARB holds interest rates or delivers a modest cut. The fiscal primary surplus is intact. The Cape route window is brief—insufficient for infrastructure investment but enough for incremental bunkering revenue if government moves quickly. Given Iran's publicly stated unwillingness to negotiate while under attack, and the US posture of unconditional surrender, this scenario is assessed as low probability in the near term.

This scenario is triggered by a prolonged Hormuz closure that prevents the normalisation of Gulf oil exports—partially reflected in the current oil price already, with Iraq's southern field production down approximately 70% from pre-conflict levels and Kuwait and the UAE also announcing production cuts.

Goldman Sachs has warned that if Hormuz flows remain depressed throughout March, oil prices could exceed the 2008 and 2022 peaks; at these levels, global demand destruction risks materialise alongside acute distributional stress in import-dependent economies.

Inland 95-octane petrol reaches R25–R27/litre. CPI breaches 7%. The rand weakens toward R20.00 and beyond. Growth turns negative; stagflation becomes the dominant macroeconomic risk. The commodity windfall is large but structurally blocked by Transnet capacity constraints, energy cost pass-through, and timing lag. ⁷

At this scale, the Cape route becomes a strategic infrastructure question attracting co-investment interest from global shipping companies and oil majors—but only if South Africa can demonstrate reliable operational capacity.

4. Strategic advantage. Structural constraints

South Africa's position in this shock is distinguished by three simultaneous advantages unavailable to most African economies:

A record commodity price windfall
A uniquely activated maritime corridor
A stronger fiscal starting position than in any previous comparable crisis.

Yet all three advantages share the same constraint:

Transnet is the bottleneck on commodity export volumes and port capacity.
Port pricing and regulation constrains maritime revenue capture.
The tax system's timing lag means fiscal benefits arrive after expenditure pressure peaks.

The political economy is structurally asymmetric: oil pain is immediate, broad-based and regressive; commodity and maritime gains are lagged, concentrated and flow through corporate channels before reaching households.

For businesses, this creates a differentiated impact landscape. Energy-intensive industries, transport operators and food retailers face near-term margin compression regardless of scenario. Mining companies, particularly gold and PGM producers, are in a period of exceptional revenue opportunity. Logistics and maritime services companies—if positioned correctly—face a durable demand opportunity of a scale that may not recur for years.

5. What to watch

Any credible US-Iran negotiating pathway would be the most significant positive data point. Iran's publicly stated position—"not asking for a ceasefire"—and the US posture of unconditional surrender suggest no near-term breakthrough. Monitor statements from both foreign ministries and any third-party intermediaries.

The first formal rate decision under conflict conditions. A 25bp hike is now being priced by some market participants; this would represent a meaningful shift from the pre-conflict trajectory. ²

The most politically sensitive domestic data point for Q2. CEF under-recovery data as of 5 March suggests a very large adjustment. The quantum of the increase will determine whether CPI moves toward 5.5% or toward 7%. ³

Only two to three commercial vessel transits per day as of early March—a near-total standstill. Sustained zero confirms Scenario A; any meaningful resumption signals movement toward Scenario B.⁷

Last clean pre-shock baseline; anchors SARB's Q2 trajectory and informs the March rate decision. ¹

Whether Cape route traffic translates into SA port calls or diverts to regional competitors. The MGO duty-free fix and dedicated bunker berth allocation at Durban and Cape Town are the two most immediately executable policy levers. ⁶

A sustained move above $6,000/oz materially improves the net fiscal position and mining sector profitability. Monitor JPMorgan and Goldman Sachs commodity research updates.

Already down approximately 70% from pre-conflict levels. Further deterioration confirms Scenario C; any recovery is a direct Scenario A/B boundary signal. ⁷

6. Implications by sector

Mining (gold, platinum group metals, other commodities such as coal)

Immediate: Revenue windfall at record prices

Medium-term: Transnet export capacity ceiling for commodities exported via rail and ports; timing of fiscal pass-through

Energy and fuel retail

Immediate: Pump price increases and margin management
Medium-term: April levy compounding; potential SARB interest rate tightening

Food and consumer goods

Immediate: Input cost and transport cost inflation
Medium-term: Second-round consumer price inflation effects; consumer disposable income compression

Logistics and freight

Immediate: Higher fuel costs; potential Cape route demand
Medium-term: Port efficiency and pricing competitiveness

Financial services

Immediate: Rand volatility; interest rate outlook reversal
Medium-term: Mining sector credit quality improvement; retail credit stress

Maritime and bunkering

Immediate: Demand opportunity
Medium-term: Regulatory constraints on marine gas oil; berth capacity

End notes

Statistics South Africa, Consumer Price Indices and Inflation Rates—January 2026 (Statistical Release P0141). Headline CPI at 3.5% year-on-year; food inflation at 4.4%; transport at -0.2%.
South African Reserve Bank, Monetary Policy Committee Statement, January 2026. Repo rate held at 6.75% (four-to-two vote).
Department of Mineral Resources and Energy (DMRE), Fuel Price Media Statement, March 2026. Inland 93-octane petrol at R20.19/litre; 95-octane at R20.30/litre; effective 4 March 2026. CEF under-recovery data (5 March 2026) showing 378c/litre for 95-octane and 357c/litre for 93-octane reported by Bizcommunity/IOL, 9 March 2026.
National Treasury, Republic of South Africa, 2026 Budget Review, 25 February 2026. Main tax revenue projection of R2.08tn for 2026/27; gross tax revenue of R1.98tn in 2025/26 (R28.3bn overrun vs 2025 budget). Gross loan debt stabilising at 78.9% of GDP in 2025/26. GDP growth projection of 1.6% for 2026. Contingency reserve of R32.6bn over the MTEF period. Fuel levy adjustments effective 1 April 2026: GFL to R4.10/litre for petrol; carbon fuel levy to 19c/litre petrol, 23c/litre diesel; RAF levy +7c/litre.
National Treasury, 2026 Budget Review, Chapter 4: Revenue Trends and Tax Proposals. Mining-sector provisional tax collections in December 2025 contributed materially to revenue overrun, driven by higher PGM and gold prices.
International Bunker Industry Association (IBIA), Change in Bunkering Activity — Red Sea Attacks on Commercial Shipping, Africa Bunker Activity Report, June 2024. South African volumes at 80,000 MT/month in Q1 2024 vs 130,000 MT/month in 2023; Mauritius doubled to 60,000–65,000 MT/month; Walvis Bay demand reportedly doubled. Available at: https://ibia.net/change-in-bunkering-activity-red-sea-attacks-on-commercial-shipping/ (see also IMO-hosted PDF) TNPA public statements on bunkering upticks, March 2026.
On Hormuz transit data: Windward AI, Iran War Maritime Intelligence Daily reports, 5–10 March 2026. Joint Maritime Information Centre (JMIC) advisory data as reported in USNI News, 'Operation Epic Escort: Pentagon Weighs Options on Strait of Hormuz Transits,' 10 March 2026. On Iraq production: Reuters, 'Iraqi oil production collapses as Hormuz still blocked by US-Iran war,' 8 March 2026; see also OilPrice.com, 9 March 2026. On the $140–$150 oil price tail risk scenario: Goldman Sachs Research, 'How Will the Iran Conflict Impact Oil Prices,' March 2026. Goldman Sachs client note on $150/barrel risk reported by Reuters, 6 March 2026, and UPI, 10 March 2026. On VLCC tanker rates: LSEG data as reported by CNBC, 4 March 2026. The 3–5mn bpd global supply loss figure in Scenario C is an analytical estimate based on combined Iraqi, Kuwaiti and UAE production cuts reported as of early March 2026.

Contact us

Lullu Krugel

Chief Economist and Africa Sustainability Leader, PwC South Africa

Tel: +27 (0) 82 708 2330

Dirk Mostert

Director | Strategy&, PwC South Africa

Tel: +27 (0) 82 800 9326

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