As if we haven’t been hit by enough rising costs – the war in Ukraine threatens to hit our pockets even harder with surging global oil prices due to the threat of a lack of supply and a failure to meet demand.
Brent crude surged almost 10% on Sunday evening to $130 a barrel and reached $139 a barrel at one point.
US Secretary of State Antony Blinken said the US was in consultation with its European counterparts to consider an embargo on Russian oil, which is set to drive up prices. The Financial Times reports oil could top $200 a barrel should the Western world decide on a ban for all Russian oil as the US would not be able to meet the supply shortfall.
On home soil, we could see fuel prices double in price and rise to R40 a litre and with much of Eskom’s energy production relying on imported diesel, electricity prices could be affected and increase by as much as 40%.
Finance minister Enoch Godongwana is said to be working with energy minister Gwede Mantashe on reviewing how SA’s fuel price is structured, to bring costs in line with the economy.
Hopefully, Godongwana and co can bring us some relief.
TreasuryONE says the week begins with “massive risk aversion and turmoil in currency and equity markets while commodity prices are surging.” There is also a fear that the surging oil prices and weakening of global economies would lead to a recession in Europe.
“EM currencies are on the back foot this morning, with the Rand trading at R15.40 while we see the Indian Rupee and the Russian Ruble hitting all-time weakest levels. The R15.50-level is still holding, but with increased volatility expected, we could see a break and possible test of the R15.75 area,” comments TreasuryONE.
On the commodity front, gold is currently trading at $1,985, platinum at $1,148 and palladium is at $3,162.
Meanwhile, the US has rubbished a suggestion made by President Ramaphosa that had US President Joe Biden agreed to meet with Russian President Vladimir Putin in the days before Russian forces entered Ukraine, the invasion could have been avoided.
Daily Maverick reports in an interview with US deputy secretary of state Brian McKeon that all diplomatic options were explored and yet Russia still chose war. On South Africa’s abstention from the United Nations resolution vote condemning Russia and calling for the withdrawal of Russian troops from Ukraine, McKeon said abstention was better than voting ‘Yes’ but the US would have preferred if SA had voted in that way.
So far, South Africa has chosen the route of quiet diplomacy and has refused to “choose sides”
And finally, in some bizarre news over the weekend, transport minister Fikile Mbalula tweeted out that he had landed in Ukraine on Saturday morning, which prompted South African social media users to mock Mbalula and send condolences to the people of Ukraine.
Mbalula and his spokesperson could not be reached for comment at the time while ANC spokesperson Pule Mabe said he suspected Mbalula’s Twitter account had been hacked.
Curiously on Sunday, Mbalula tweeted again and invited media to join him on his visit to driver’s licence testing centres on Monday morning, signalling he was back in South Africa?
Today at 10:00 we should get some clarity over what exactly happened over the weekend when media will surely show up at testing centres to ask Mbalula some ‘important questions’.
Here’s a roundup of the world’s top and most interesting headlines:
SA Business
Riots, cyberattacks and strikes contribute to SA’s low growth – Daily Maverick
Zikalala: Shops in rural areas affected by July unrest to get R100k govt loan – EWN
How a ‘tiny’ company came to can much of SA’s craft beer – and most canned wine for export – Business Insider
Global Business
Ship forced to move on after dockers at UK refinery refuse to unload Russian oil – The Guardian
Russian banks turn to China as Visa, Mastercard suspend business – Fin24/Bloomberg
Ukraine war ‘catastrophic for global food’ – BBC
Markets
Asian Stocks Down as West Seeks to Ban Russian Crude Supplies – Investing.com
Dollar Up, Euro Slides as Concerns of Inflationary Shocks Increase – Investing.com
Ukraine War Puts Asia’s Stock Gauge on Track for Bear Market – Bloomberg
Tech
Netflix Is Shutting All Services in Russia – Bloomberg
Toshiba Concerned Chip Crisis May Deepen After Ukraine Invasion – Bloomberg
What to expect from Apple’s ‘Peek Performance’ March event – The Verge
Video
‘We will not forgive,’ says Zelenskiy – Reuters
Two years since first SA COVID-19 case – eNCA
War in Ukraine | Nelson Mandela Foundation calls for cessation of hostilities – eNCA
