Oil climbs again as South Africans absorb October fuel increases
JOHANNESBURG — Oil prices climbed towards two-week highs on Monday as fresh attacks in the Middle East overshadowed Donald Trump’s promises of additional Russian diesel supplies and a halt to strikes on Russian and Ukrainian energy infrastructure. The renewed pressure comes days after South Africans absorbed sharp increases in petrol and diesel prices.
Brent crude futures rose approximately 2% to $106.76 a barrel by 5.07pm South African time, according to Reuters. US benchmark West Texas Intermediate was also about 2% higher at $93.69. Both had recovered from earlier losses, illustrating how quickly expectations of supply relief gave way to concerns about further disruption. These were intraday prices, rather than final closing levels.
The Iran-aligned Houthi movement claimed responsibility for a Saturday attack on Riyadh’s international airport that killed 13 people and wounded more than 300, Reuters reported. Further attacks followed on Sunday. Reports of additional attacks on tankers travelling through the Strait of Hormuz have also raised concerns about the recovery of Middle Eastern crude exports.
The uncertainty has complicated Trump’s effort to calm energy markets. On Sunday, he announced that Russia and Ukraine had agreed to stop attacking each other’s energy facilities, following his earlier diesel arrangement with Vladimir Putin. However, Ukrainian President Volodymyr Zelensky said Russian attacks subsequently struck a power plant, a gas production facility and a civilian petrol station.
Russia had not confirmed an agreement in the reporting reviewed. Zelensky said Ukraine would respect a halt to energy attacks if Moscow did the same, leaving traders without clear evidence that the announced arrangement would protect infrastructure or improve fuel supplies. The prospect of more Russian diesel therefore remained alongside continuing risks to production and transport.
For South African motorists, Monday’s oil rise adds uncertainty to the next fuel-price calculation rather than confirming another increase. Reuters reported last week that the government announced petrol increases of as much as 12% and wholesale diesel increases of 10%, effective from 7 October, reflecting the impact of the Iran war on international energy markets.
South Africa adjusts fuel prices monthly, using international petroleum product prices, the rand-dollar exchange rate and other components. The Department of Mineral and Petroleum Resources explains that the calculation draws on prices over a review period, so a single day’s crude movement cannot determine the next adjustment. Changes in refined petrol and diesel prices can also differ from movements in crude.
Currency movements provide another channel of exposure. Because imported fuel is priced internationally, a weaker rand can increase its local cost even when dollar prices are steady; a stronger rand can offset some international pressure. Freight and other import costs also form part of the pricing structure.
The immediate consequence for households and businesses is continued uncertainty over transport costs after October’s increases. Sustained relief will depend on the course of international fuel prices and the exchange rate through the review period, with the next official adjustment needed before any new pump-price change can be established.
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