US bombs spark oil price inferno – South Africa faces potential 40c/l surge, inflation spike, and rate cut reversal.
South Africa stands on the brink of catastrophic fuel price increases in July following the United States’ bombing of Iranian nuclear facilities this weekend, with analysts warning of potential petrol and diesel hikes exceeding 40 cents per litre and severe economic fallout.
The unprecedented escalation saw US President Donald Trump announce on Saturday that key Iranian nuclear sites were “completely and totally obliterated.” The direct military intervention – a dangerous new phase in the Israel-Iran conflict – ignited global oil markets, with Brent crude projected to surge toward $130 per barrel.
Market meltdown: “The framework is broken”
“The US strike on Iran’s nuclear sites is a market-defining moment, and ‘a direct hit’ to the assumptions that have been driving investor positioning: lower inflation, falling rates, and stable energy prices. This framework has just been broken.”
— Nigel Green, CEO of deVere Group
“As markets reopen, investors are bracing for sharp volatility, with crude oil prices expected to surge… A conflict that had remained largely contained is now threatening to trigger broad-based repricing across the global economy.”
The Strait of Hormuz – conduit for 20% of global oil – is now a critical flashpoint. Green further emphasises:
“Any closure or threat to the Strait of Hormuz would send prices sharply higher. Such a price shock would filter through to global inflation.”
SA’s fuel crisis: From bad to catastrophic
Pre-attack mid-June CEF data projected modest July hikes:
• Petrol 93/95: +6c to +9c/l
• Diesel: +10c to +12c/l
These forecasts are now void. Industry sources confirm projections have tripled, with a 40c/l+ increase modelled post-attack. This threatens to:
- Erase June’s relief (Petrol: -2c, Diesel: -37c)
- Reverse four months of declines (March | April-May)
- Compound June’s General Fuel Levy hike (+16c/l petrol, +15c/l diesel)
Projected July prices (if oil surges)
| Fuel Type | June Inland | July Projected | Increase |
|---|---|---|---|
| Petrol 93 | R21.24 | R21.64+ | 40c+ |
| Petrol 95 | R21.35 | R21.75+ | 40c+ |
| Diesel 0.05% | R18.53 | R18.93+ | 40c+ |
| Diesel 0.005% | R18.57 | R18.97+ | 40c+ |
Economic domino effect
- Inflation Tsunami: Transport, food, and manufacturing costs will skyrocket.
- Interest Rate Reversal: Green warns: “If inflation spikes back up, monetary policymakers will be forced to hold, and possibly even reconsider the easing cycle altogether.”
- Rand Collapse Risk: Oil imports + risk aversion could crash the currency.
- Sectoral Carnage: Travel, tourism, and tech stocks face sell-offs.
Critical countdown
The DMRE will announce official prices by 28 June, effective Wednesday, 2 July 2025. Final figures depend entirely on:
- Iran’s retaliation & Strait of Hormuz stability
- Global oil volatility
- Rand’s resilience
Track daily updates via the CEF’s tracking portal
South Africa’s fuel outlook has turned from concerning to catastrophic overnight. Motorists and policymakers now face a perfect storm of geopolitical chaos and economic vulnerability.
Stay informed on this developing crisis.
NOWinSA — Stories Shaping South Africa Today.
