Global oil shock forces rethink of South Africa's policy and investment strategy

Stephen Grootes speaks to Old Mutual Investment Group’s Siya Mbatha about how the Strait of Hormuz disruption has pushed energy security to the centre of South Africa’s economic outlook, and why Sasol is increasingly being viewed not just as a cyclical commodity stock, but as a strategic pillar of national energy resilience under structurally higher oil prices.

Listen to the interview in the audio player below.

The ongoing disruption in the Strait of Hormuz is no longer a short-term shock, but fast becoming a structural turning point for global energy markets. For South Africa, the consequences are already filtering through to inflation, fiscal policy and investment decisions.

That is the central message from the latest update by Old Mutual Investment Group, where analysts are warning that oil prices are unlikely to return to pre-conflict levels of $60 per barrel or lower anytime soon.

Six weeks into the conflict, around 13 million barrels per day of oil production and 2.7 million barrels of refining capacity remain offline. The cumulative supply loss has already exceeded 550 million barrels, tightening global supply and keeping prices elevated.

Speaking to Stephen Grootes on The Money Show, Old Mutual investment analyst Siya Mbatha says domestic refining capacity covers less than 20% of fuel demand, with the majority of the rest imported, from the Middle East.

He says for South Africa, the vulnerability is clear.

"Even if we have a ceasefire tomorrow, and the Strait of Hormuz is open, and everybody expects everything to go back to normal. That wouldn't be the case given the extent of the conflict."

- Siya Mbatha, investment analyst - Old Mutual Investment Group

"Oil's about $100 a barrel now. Can oil go lower, most certainly. But do I think it will go back to $60? It's unlikely."

- Siya Mbatha, investment analyst - Old Mutual Investment Group

"So we will have elevated oil prices, potentially not so high if we do see a resolution in the war."

- Siya Mbatha, investment analyst - Old Mutual Investment Group

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