Globally, conflict in the Middle East shows no signs of easing following US and Israeli strikes on Iran, while locally, South Africa may see a big fuel price hike in early April as the ongoing conflict pushes oil prices higher.
International Market Developments
The conflict in the Middle East shows no signs of easing following US and Israeli strikes on Iran, pushing crude and natural gas prices higher. The conflict in the Middle East has now headed into its second week, with no signs of an easing in tensions. The US and Isreal continue to strike Iran, attacking oil facilities in and around Tehran, whilst Iran has expanded its missile and drone attacks around the region, hitting a water desalination plant in Bahrain, setting a government building in Kuwait alight and targeting energy infrastructure across the region. The Strait of Hormuz remains closed whilst there are some signs that Arab states are starting to wind down oil production, intensifying oil supply concerns. The conflict does not show signs of stopping soon, with Iran’s Assembly of Experts announcing that Mojtaba Khamenei, the second son of late Ali Khamenei, has been chosen to succeed his father as Supreme Leader, signalling that hardliners remain in charge. The intensification in the conflict over the weekend has caused oil prices to surge as high as $119/b, the highest since mid-2022.
The US February CPI report will be a key focus this week Wednesday. Headline inflation is expected to have remained at 2.4% y/y in February. On a m/m basis, CPI is expected to have increased by 0.3% in February, following a 0.2% increase in January.
Local Market Developments
South Africa may see a big fuel price hike in early April as the ongoing conflict in the Middle East pushes oil prices higher. The oil price surged as high as $115, a staggering 65% higher than the prior Friday (27 February) just before the start of the conflict. In addition to this, refining margins have surged on the back of disruptions to supply. The South Africa basic fuel price is linked to refined petroleum prices in the Mediterranean, Arab Gulf and Singapore, which will include the effects of higher refining margins.
Locally, GDP growth for Q4:25 is in the spotlight Tuesday and is expected to have increased by 0.3% q/q (sa), after having increased by 0.5% q/q (sa) in Q3:25. On a y/y basis, GDP growth is expected at 1.8% in Q4:25, after having increased 2.1% y/y in Q3:25.