South African Trading Conditions Recover as Oil Prices Ease After US‑Iran Conflict
Following a spike in hostilities between the United States and Iran in early 2026, global crude oil markets reacted sharply, pushing Brent prices to roughly $119 per barrel in late April. The surge fed directly into South Africa’s fuel costs, lifting the country’s year‑on‑year inflation to 4 % in April—its highest level since August 2024—according to Statistics South Africa.
By June, however, diplomatic de‑escalation hopes helped oil prices retreat to about $72 per barrel. The South African Chamber of Commerce and Industry (Sacci) captured this shift in its monthly business‑sentiment survey, showing a measurable improvement in trading conditions despite lingering pressures.
Key Findings from the SACCI June Survey
- The composite trading‑conditions index—covering sales volume, new orders, supplier deliveries, inventories and employment—stood at a seasonally adjusted 36 in June, up from 37 in May but still below the 46 recorded in April.
- Input‑cost pressures eased: 75 % of respondents had reported higher input costs in the April survey; by June, the share noting cost increases had fallen noticeably as crude prices declined.
- The trade‑expectations index, which gauges six‑month outlooks for the same five components, rose to 68 in June from 62 in May and 49 in April.
- Employment expectations improved markedly, with the expected‑employment component climbing from 40 in April to a projected 57 for the next six months.
Impact of Oil Price Movements on Inflation and Business Costs
Sacci’s analysis links the April inflation jump to the first in a series of steep monthly fuel price increases triggered by the oil‑price peak. Higher pump prices raised household transport expenses and increased operating costs for manufacturers, logistics firms and retailers.
As oil prices fell, businesses reported:
- Lower input costs, especially for energy‑intensive sectors such as mining and agriculture.
- Stable selling prices over June, although general price levels began to reflect the full impact of earlier fuel hikes.
- A modest rebound in sales volumes and new orders, reversing the downward trend seen in May.
The chamber noted that while inventories and order backlogs turned positive in June, the overall trading‑conditions index remained below the neutral 50‑point mark, indicating that the sector was still operating in a contractionary phase.
Outlook for the Next Six Months
Sacci anticipates a continued improvement in trading conditions, driven by:
- Sustained lower crude oil prices, which should keep fuel‑related cost pressures in check.
- Expected increases in employment as firms respond to improved demand signals.
- Gradual normalization of supply chains that were strained during the April price shock.
The trade‑expectations index of 68 suggests that businesses are cautiously optimistic about growth prospects through the end of 2026. Nonetheless, the gap between current conditions (index 36) and expected conditions remains wide, underscoring the need for vigilant monitoring of geopolitical developments that could reignite oil‑price volatility.
For stakeholders, the SACCI survey offers a timely, data‑driven snapshot of how external shocks—such as the US‑Iran conflict—translate into domestic economic dynamics, and how quickly South African businesses can adapt when external pressures ease.
