On Sunday, 1 March 2026, vessel traffic through the Strait of Hormuz (Iran) slowed to a near standstill, the first near-complete halt in modern history. This followed joint US-Israel strikes on Iranian targets, with Iran responding via missile strikes on regional military and urban sites while sparing major oil infrastructure so far.
The halt stems largely from precautionary measures: insurers cancelled policies and raised war-risk premiums, prompting major shipping lines to suspend transits. J.P. Morgan notes that up to 16 million barrels per day (mbd) of crude exports are at risk, with only limited rerouting capacity (3.3 mbd via pipelines), leaving 12.6 mbd vulnerable. Gulf producers have storage for roughly 22-25 days before potential shut-ins would be forced.

Immediate Market Response

Brent crude gapped higher on reopening, trading in the high $70s to low $80s (briefly touching $82 intraday), up 6 – 9% from Friday’s close, depending on the session. The forward curve has steepened sharply, entering backwardation of $10-$15/bbl, reflecting acute near-term supply concerns. Tanker freight rates (VLCC MEG–China) have rallied to near six-year highs, adding further cost pressure.
Gold has risen as a haven, while risk assets (equities, EM currencies) sold off. The US dollar strengthened on flight-to-quality flows.

Transmission to South Africa.

As a net oil importer, South Africa feels these shocks acutely through three main channels:

Fuel and Inflation Passthrough
Higher Brent feeds directly into petrol and diesel prices, which form a significant part of the CPI basket. A sustained move above $80-$90/bbl could add 2-4 percentage points of inflation over the coming quarters if disruptions persist. The SARB, having enjoyed relatively benign inflation recently, may need to adopt a more cautious tone on rates.

Rand Pressure
The rand weakened 1.3 – 1.5% on Monday to trade around R16.10 – R16.17 per dollar, illustrating classic EM risk-off behaviour. A stronger dollar (driven by Fed caution on rate cuts) and capital outflows from emerging markets amplify this. A weaker rand raises the cost of all imports, not just oil, and can widen the current-account deficit if prolonged.

JSE and Asset Class Divergence
Resources outperformed early: gold’s rise (up 1 – 2%) and the strongest rand-gold correlation since 2016 boosted miners. The FTSE/JSE Resource 10 Index gained more ground. Banks, retail, consumer, and property face headwinds from higher funding costs, squeezed margins, and slower household spending.
Offshore earners (e.g., select tech or consumer multinationals) offer relative resilience via dollar translation benefits. Local bonds (10-year SAGB yield 9.5%) could see modest upward pressure as global yields rise and inflation expectations tick higher.

Prolonged disruption: If tensions last beyond 3–4 weeks, Brent could rise to $100–120/bbl, lifting South Africa’s CPI through higher fuel and transport costs. This would constrain the South African Reserve Bank, pressure GDP by 0.5–1%, push bond yields toward 10–11%, and weigh on cyclical sectors. Resources, gold, and dollar exposure would act as key
hedges.

Swift de-escalation: If tensions ease, oil may fall to $70–80/bbl, relieving CPI pressure and creating scope for rate cuts. Lower bond yields, a firmer rand (toward R15.60), and improved risk appetite would support banks, retail, and consumer shares.

Periods like this can feel unsettling, but short-term headlines should not drive your Global investment decisions. Geopolitical events may create volatility, yet core fundamentals determine long-term returns. Earnings growth, valuation, Interest rates cycles, and disciplined asset allocation remain the key to success. Reacting emotionally to market movements can undermine your long-term investment objectives. It is now the time to apply discipline and adherence to your long-term financial plan.

We continue to actively monitor global markets and will communicate any material changes that could affect your portfolio going forward. Our focus remains on protecting your portfolio through changing conditions.

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