CRISIS LOOMS AMID RISING OIL PRICES

AS THE ongoing conflict between Israel and Iran intensifies thousands of kilometres away, South African consumers are bracing for increased financial pressure stemming from a surge in global oil prices.

- SIPHELELE DLUDLA

With the Israeli bombardment of Iranian military targets escalating hostilities, the ripple effects of this geo-political strife are expected to dampen household budgets, leading to higher inflation and rising costs of living.

The war erupted over a week ago as Israeli airstrikes targeted Iranian military infrastructure, including pivotal oil and gas facilities such as the South Pars gas field and the Shahr Rey oil refinery, provoking retaliatory missile attacks by Iran on major Israeli cities.

This has raised alarm bells among market watchers, particularly given Iran's critical role as the third-largest oil producer within the Organisation of the Petroleum Exporting Countries (OPEC+), contributing around four million barrels of crude oil per day and controlling access to the vital Strait of Hormuz.

The Strait of Hormuz is a crucial maritime chokepoint through which approximately 18-19 million barrels per day or 20% of global oil shipments pass, making any potential disruption a considerable concern for worldwide oil supply.

Despite Iran maintaining crude exports at 2.2 million barrels per day amid the conflict, rising shipping costs and delays due to the potential blockade of this strategic waterway could influence inflation across the globe.