Summary

March market crash: Understanding the impact of rising fuel prices MARKETS ON MONDAY March 2026 saw global financial markets plummet over 10% amid escalating tensions in the Middle East. As fuel prices surge and the Rand weakens, what does this mean for investors and the economy? Explore the potential repercussions and the uncertain path ahead. Image: Nicola Mawson / Independent Newspapers Financial markets across the globe await the possibility of the opening of the strait of Hormuz. CNBC reported that “As of May 8, 2026, the Strait of Hormuz remains effectively closed to most commercial shipping due to an ongoing blockade following the outbreak of conflict between the U.S./Israel and Iran in late February 2026. While negotiations are ongoing, Iran has stated it will not reopen the waterway without its permission, suggesting a full reopening may not occur until the second half of 2026”. This statement from Iran stopped a sharp decrease in the oil price on Friday. Markets were optimistic from last Tuesday to Thursday that the strait may be opened within the coming week. In reaction the brent oil price fell sharply from $113 last Monday to as low as $97 on intra-day trade on Thursday (7 May). This optimism saw the prices for precious metals recover quickly and the Rand exchange rate appreciated strongly. The Gold price increased last week $184 to close Friday on $4 707, whilst the price of platinum shot up by $82 per ounce to $2 052 on Friday. The Rand exchange rate improved by 40 US cents from $16.80 last Monday to close on $16.40 last Friday. At one stage last Wednesday the Rand traded as low as R16.26/$. This is only 30 cents weaker than the R15.96 the day before the Iran attack by the US and Israel. On the JSE share indices followed the same pattern, leading by the JSE metal and mining index. The index improved by 6.65% last week. This strong increase pushed the Top 40 index higher by 4.8% higher last Thursday but given the uncertainty around the opening of the strait of Hormuz, the index ended the week 2.7% higher. The ALSI followed the same pattern as it advanced quickly by 3.5% over the week till Thursday but lost 1.06% on Friday. Fuel Prices Given the sharp increase in the Brent oil price and the sharp depreciation in the Rand/$ exchange rate, the price for petrol was increased by R3.27 per liter and that for diesel by R5.26 per liter last Wednesday. The Minister of Finance Mr Enoch Godongwana renewed the lower fuel levy of R3.00 per liter for petrol and increased the lower fuel levy for diesel to R3.93 per liter. Both the price of petrol R 26.63 and diesel R31.17 reached record prices from last Wednesday. Many analysts feared that these prices may even rise again at the beginning of June, especially if the lower fuel levy expires. This will have a severe effect on prices throughout the economy given the massive downstream effects on food and other input costs in the economy. The MPC of the Reserve Bank already forecasted it that the inflation rate for South Africa will quickly increase from 3.1% in March to 5.0% by the second part of the year. Under such a scenario a 50-basis point increase in interest rates was envisaged. The strong recovery in the oil price last Thursday and Friday, to levels just above $100 per barrel and the appreciation of the Rand with 40 cents/$ had changed these fears. By last Friday, the price for diesel had already recovered by R2.48 cents per liter, whilst the price for petrol was still under recovered by 83 cents per iter. It is now expected that this more favourable position may improve over the next three weeks and that motorists may experience lower prices in June, especially for diesel. Prospects for the coming week This coming week financial markets will still be mostly affected by the events of the ongoing conflict in the Middle East. It was announced on Friday that the US economy added 115,000 jobs in April 2026, according to the latest report from the Bureau of Labor Statistics (BLS). This figure significantly exceeded market forecast of 62,000. Together with the higher fuel prices in the US and the inflation rate for April that will be announced this Tuesday and that is expected to remain at 2.3%, it is now a given that the Federal Reserve will not lower interest rates. The Federal Open Market Commission (FOMC) will meet next week. The US will also release its retail sales for April this coming Thursday. Elsewhere the UK will announce its economic growth rate (GDP) (preliminary estimation) for Q1025 on Thursday Domestically, STATSSA will release the latest mining production figures for Marh on Thursday Chris Harmse is the consulting economist of Sequoia Capital Management and a senior lecturer at Stadio Higher Education. Chris Harmse is the consulting economist of Sequoia Capital Management and a senior lecturer at Stadio Higher Education. Image: Supplied