Oil prices jump as global tensions rise, but what the impact on SA's fuel and food prices?

Stephen Grootes speaks to John Stopford, head of multi-asset income at Ninety One about the escalating conflict involving Iran and the growing risks to global oil supply.

Listen to the interview in the audio player below.

Oil prices have been swinging sharply as geopolitical tensions flare up in key parts of the world.

For countries like South Africa, which rely heavily on imported fuel, that volatility can quickly spill over into everyday life.

When conflict or political instability threatens major oil-producing regions, global markets react almost immediately. Traders worry about supply disruptions, and prices tend to climb. Even the fear of disruption can be enough to move markets.

Oil is traded globally and priced in US dollars. When there are tensions in oil-rich regions, especially in the Middle East, investors become cautious. Any risk to supply, whether from sanctions, shipping route disruptions, or military conflict can push prices higher.

Because oil is a key input in transport, manufacturing and agriculture, even small price increases can have wide ripple effects.

South Africa imports most of its crude oil. That means local fuel prices are closely tied to global oil prices and the rand-dollar exchange rate.

Speaking to Stephen Grootes on The Money Show, John Stopford, Head of Multi-Asset Income at Ninety One says the escalating conflict in the Middle East impacts global oil supply, and will have a knock-on effect around the world, including here in South Africa.

"One of the big unknowns is whether this escalates further, how long it lasts and so on, so there is an element of risk premium being built in as well. So traditionally the more volatile parts of markets have been hit a bit harder than others."

-  John Stopford, Head of Multi-Asset Income - Ninety One 

"There rand remains a more volatile than average currency. Then I guess from that there's a bit of a feed through to inflation with a somewhat weaker rand, higher oil prices. So it's not surprising that the bond market domestically in South African has done relatively poorly today."

-  John Stopford, Head of Multi-Asset Income - Ninety One

Scroll to the top of the article to listen to the full interview.