Oil Market Developments and Namibia’s Fuel Prices
GLOBAL oil prices have again experienced a highly volatile few days. On 7 April, Brent crude in Namibia dollar terms closed 60% above its pre-conflict level. The following day, a US-Iran ceasefire announcement wiped out much of that premium in a single session. By mid-day yesterday, prices had already begun climbing again as vessel traffic through the strait remained negligible and doubts over the ceasefire’s durability grew.
As for Namibian pump prices, currently at N$22.08 per litre at Walvis Bay, petrol sits just 20 cents below its all-time high recorded in 2022 – the last time crude traded near these levels. The Ministry of Industries, Mines and Energy will make its decision on the May fuel price based on its review of the fuel pricing model, which will be influenced by developments over the next two weeks.
About 20% of global oil supply flows through the Strait of Hormuz. Before the conflict, more than 130 vessels crossed daily. In the 24 hours after Iran conditionally lifted its blockade, only seven ships made the transit, no different from the daily average during the war itself.
Iran subsequently reported suspending tanker traffic again after Israel launched strikes on Lebanon, with Tehran arguing that the attacks violated the ceasefire, while the United States (US) and Israel maintain that the agreement was never intended to cover Hezbollah in Lebanon. Meanwhile, insurance cover is currently only available voyage by voyage at sharply elevated premiums, with underwriters unwilling to commit while live threats persist.
Formal negotiations begin this weekend, with Pakistan set to host in-person talks between the US and Iran as they seek a conclusive agreement to settle all disputes.
*Tannan Groenewald is the head of data and analytics at Cirrus.
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