CAPE TOWN – The drone attack at oil facilities in Saudi Arabia has already impacted October's fuel prices in South Africa, but is unlikely to cause a rise in interest rates through significantly higher inflation, economists said on Wednesday.
Reuters reported that Saudi Arabia’s oil output – it supplies about 42 percent of South Africa’s crude oil requirements – will be fully restored quicker than thought, taking two or three weeks, not months as initial indications suggested.
The kingdom was already close to restoring 70 percent of the 5.7 million barrels per day production lost due to the attacks. Saudi Arabia also announced it would produce evidence of involvement by Iran in the attack, stoking further geopolitical risk in the region.
Momentum Investments economist Sanisha Packirisamy said South Africa was not exposed to any significant risk from Iran as it no longer imported oil from that country, but there might be a longer term impact due to South Africa’s heavy reliance on oil from Saudi Arabia.
“A rise in geopolitical risks could similarly see the international price of oil picking up and emerging market currencies selling off as risk appetite abates,” she said.