The US-Iran conflict has escalated after a US attack killed Iran’s Supreme Leader on Saturday, 28 February, causing elevated uncertainty in South Africa on multiple fronts.
The country now faces higher fuel prices from the shock to global oil markets, the resulting impact on inflation, and a follow-through on the risk forecast for interest rates.
Politically, South Africa’s ties to Iran may also place the country under scrutiny, with trade tensions elevated, and second-round blowback possibly hitting corporate SA.
International relations experts warn that South Africans may soon feel the impact of the US-Iran conflict through surging fuel and food prices as US and Israeli air strikes on Iran continue.
In addition, University of Johannesburg (UJ) economist Dr Ntokozo Nzimande said the Israel-Iran conflict could adversely affect South Africa’s economy, potentially leading the government to halt interest rate reductions and causing transport and food costs to rise.
Historically, inflation in the country has been significantly affected by changes in exchange rates and international commodity prices, particularly oil prices.
The South African Reserve Bank (SARB) last changed interest rates in November 2025, with the current prime lending rate at 10.25% and the repo rate at 6.75%. This followed a sequence of rate reductions in 2024 and 2025.
Nzimande warned that the closure of the Strait of Hormuz, which lies within Iran’s territorial waters and accounts for roughly 20% of global oil trade, could adversely affect the country’s economy.
“It will increase fuel prices in South Africa, it will raise transport and food prices, it may push inflation to even above the target, and it will complicate the monetary policy decision,” said Nzimande.
Following a sizeable hike in petrol and diesel prices in March, this could lead to further fuel price increases in the coming months.
North-West University Business School economist Professor Raymond Parsons said that oil prices are expected to rise in the short term and remain high for a period. This depends on the war’s outcome and the lack of new supply measures to counteract higher oil prices.
“South Africa must not underestimate the potential negative economic and business implications that could yet unfold for many economies from the US-Israel attack on Iran,” said Parsons.
According to Aluma Capital Chief Economist Frederick Mitchell, the country also faces renewed political pressure, with South Africa a strong ally of Iran’s.
This will compound already strained relations with Washington and rising sovereign and corporate risk, he said.
“While the theatre of war is the Middle East, the economic fallout is landing squarely on South African shores,” he said.
“For an economy already grappling with a ‘fragile recovery’ narrative, the intersection of our government’s ideological alignments and Washington’s renewed ‘America First’ assertiveness has created a perfect storm of sovereign and corporate risk.”
“The arrest of Nicholas Maduro and the onset of ‘Midnight Fury’ signal a US administration that will fiercely protect its interests. Countries aiding adversarial forces can expect retribution—if not military, then certainly economic.
Further implications for tourism
Nzimande said the heightened conflict, which has led to airspace closures in some Middle Eastern countries, will significantly impact South Africa’s tourism sector.
“So what we have heard is that the airspace in some countries in the Middle East has been closed and if this expands to the rest of the Middle East, flight routes will become longer and more expensive, and the airline cost will increase, and it will increase what we call the travel uncertainty so that will affect the GDP through the tourism sector,” he said.
Aviation analyst and editor of SA Flyer magazine Guy Leitch said it is difficult to determine how long the airspace disruptions could last.
“It’s the biggest disruption we’ve had, the first was actually going to be 9/11 when we saw all those aircraft parked on the ground unable to cross the Atlantic. Though obviously, the COVID-19 lockdown must be right up there as well,” said Leitch.
The Airports Company South Africa (ACSA) has confirmed that the closure of the United Arab Emirates (UAE) airspace has affected Emirates and Qatar Airways operations, resulting in eight cancellations at O.R. Tambo International Airport in Johannesburg, four at Cape Town International Airport, and two at King Shaka International Airport in Durban.
“Travellers scheduled to depart from South African airports to the Middle East and the UAE are strongly advised not to proceed to airport precincts until they have confirmed their flight status directly with their respective airlines,” said ACSA in a recent notice.
ACSA urged South African citizens who are stranded in affected areas to contact the Department of International Relations and Cooperation (DIRCO).
Leitch predicted that if hostilities end, it could take a further three days to a week before schedules and services can be restored.
