Geopolitical instability has driven oil prices higher, leaving consumers to feel the impact at the pump. Attacks on Iran by the United States and Israel, followed by Iranian strikes on oil‑producing nations, have disrupted supply chains and sent prices soaring.
Strait of Hormuz Closure
Since the military offensive began on 28 February, shipping through the Strait of Hormuz has effectively stopped. The strait normally carries 20 million barrels of crude oil daily, along with liquified natural gas and key industrial inputs. A prolonged closure threatens automotive supply chains in Asia and Europe, with rerouting now a pressing concern.
Automotive Industry Exposure
Automakers remain vulnerable to maritime trade disruptions, particularly for semiconductors, battery materials and electronics. Chinese brands are most exposed in the Middle East market: Chery relies on the region for 12% of global sales, SAIC for 11%, and Great Wall for 6%, according to Bernstein Wealth Management.
Rising Oil Prices
On 2 March, oil prices surged nearly 7%, briefly crossing (1 353) $82 a barrel before settling at (R1 278) $78. Analysts warn prices could exceed (R1 649) $100 if instability continues. President Donald Trump has suggested the conflict could last four to five weeks, with the U.S. prepared for longer engagement.
Impact on Consumers and Retail
South Africa’s National Automobile Dealers’ Association (NADA) reports petrol prices rising by 20 cents per litre and diesel by up to 65 cents. Beyond fuel costs, higher transport and logistics expenses are filtering through to household goods and services. For automotive retailers, escalating fuel and levy costs add pressure to vehicle ownership at a time when consumer budgets are already stretched.
Photo: Unsplash
Staff Writer
Reporting from the front lines of the automotive industry, delivering expert analysis and the technical updates that drive the South African motor sector forward.
