Leaning into market fears that a ceasefire between the United States and Iran might be short-lived, a Sunday order by US President Donald Trump has sent oil prices over $100 a barrel once again.
In a social media post on Sunday, Trump ordered a blockade of the Strait of Hormuz, heightening tensions with Iran following the collapse of weekend peace talks.
The US Central Command said that its forces will begin implementing a blockade of all maritime traffic entering and leaving Iranian ports.
US forces won’t impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports, it said.
Iran said it “won’t allow” the blockade to go ahead.
As has become a regular feature of the Trump administration, the US President’s threats of escalation dented sentiment and reversed the gains made ahead of the US-Iran talks.
Last week, the US announced a ceasefire with Iran, as the two countries moved into talks over the weekend to hash out a longer-term settlement for the region.
This saw the oil price pull back from close to $111 a barrel to as low as $94 a barrel almost instantly, as market tension eased.
For local fuel prices, this provided a significant boost to recoveries, shaving close to R3.00 per litre from the under-recovery.
While fuel prices are still building for another sharp hike in May 2026, the lower oil price dulled the blade.
However, the collapse of US-Iran negotiations and the order to set up a blockade have now sent oil prices in the other direction.
The negotiations, led by US Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf, broke down due to differences over the future of Iran’s nuclear programme.
On Monday, 13 April, prices pushed back above $100 per barrel, trading at $102.
According to Onyx Capital Group Managing Director Jorge Montepeque, on Bloomberg Television, the increase—an 8% jump—is not reflective of what could happen if the US proceeds with its plan.
“It really makes no sense. It should be $140, $150,” he said.
Montepeque said the US blockade would transform a regional fight into a potentially global one, with a supply loss of up to 12 million barrels a day.
Fuel prices recoveries at 10 April 2026 – before the blockade:
- Petrol 93: increase of R3.00 per litre
- Petrol 95: increase of R3.38 per litre
- Diesel 0.05% (wholesale): increase of R10.15 per litre
- Diesel 0.005% (wholesale): increase of R10.18 per litre
- Illuminating paraffin: increase of R7.97 per litre
Bloomberg analysts noted that markets and investors will be watching closely to see whether the United States’ real-world actions again fall short of Trump’s threats.
“So far, there has been no fresh escalation in actual fighting in the Middle East,” they said.
“All the same, the potential remains for equities to move substantially lower given what oil traders are signalling.”
The other side of the fuel price, the rand, has also come under pressure due to the threat of the blockade.
The rand weakened on Monday as investors reacted to a US-Iran standoff, hitting R16.53 to the dollar. While this is a far stretch from the R17/$ hit before the ceasefire, it shows a weakening trajectory.
In a research note, ETM Analytics said that the escalation is a significant inflationary threat to South Africa. The country is already grappling with high fuel costs and energy security concerns, it said.
The crisis now threatens to raise import costs, disrupt tanker routes previously protected by its friendly status with Iran, and, in turn, intensify domestic inflationary pressures.
“The rand will come under pressure, and South Africa’s alignment with Iran appears increasingly unhelpful,” it said.
“One could extend this argument to the broader BRICS+ bloc, which has offered limited support to Iran and is unlikely to provide meaningful backing to South Africa.”
Reporting with Bloomberg and Reuters