Global energy markets have been thrown into a state of emergency following the total blockade of the Strait of Hormuz, a move that has already sent crude oil prices spiralling past $91 per barrel.
Duncan Amoah, Executive Secretary of the Chamber of Petroleum Consumers (COPEC), warned on Saturday, February 28, that the sudden escalation of conflict in the Middle East has effectively decapitated the world’s primary oil artery, with direct and severe consequences for fuel prices in Ghana.
Mr. Amoah described a deteriorating situation where diplomatic efforts have been replaced by a high-stakes maritime standoff.
The blockade is reportedly being enforced by a strategic alliance referred to by Mr. Amoah as the Iron Triangle.
He confirmed that the naval assets of Iran, Russia, and China have been deployed to seal the narrow chokepoint, through which a significant portion of the world’s energy flows.
“What I can confirm is that the Strait of Hormuz is blocked as we speak,” Mr. Amoah stated in Channel One. “The iron triangle is already active. Iran, Russia, and China have paraded their maritime infrastructure. Whatever they can deploy in that tunnel is already active. The US is also heading toward that corridor, which means no oil whatsoever has made passage since morning.”
Price shock: From $67 to $91 in 24 hours
The impact on pricing has been instantaneous and violent. Before the latest military flare-up, which included reported U.S.-Israeli strikes and the claimed death of Iran’s Supreme Leader, crude was trading in the stable range of $67 to $69. By Saturday afternoon, those figures had been decimated.
Amoah revealed that market signals indicate a surge of over 30 per cent in a single day.
“Over 22 percent of the global oil supply that should have moved since last dawn has not moved. Inventories across Europe, the US, and Asia will now attract higher premiums. You cannot expect anyone holding oil at this point to sell it cheaper,” he explained.
Implications for the Ghanaian consumer
For Ghana, a country already navigating fiscal challenges highlighted in the President’s recent State of the Nation Address (SONA), the $91 price point is a harbinger of a new wave of inflation.
COPEC warns that the “fluid” nature of the conflict means that unless the corridor is reopened by U.S. naval intervention, the cost of refined petroleum products at the pumps will skyrocket.
The geopolitical risk premium is currently at its highest level since the 2022 invasion of Ukraine. With Emirates flights from Accra already cancelled due to airspace closures and the Ministry of Foreign Affairs advising against travel to the region, the economic isolation of the Middle East is rapidly becoming a domestic crisis for Ghana.
Mr Amoah’s assessment of the immediate future was sobering. As the U.S. carrier strike groups move toward the corridor to challenge the blockade, the risk of a full-scale naval confrontation looms.
“The situation is fluid and not looking very kind,” Mr Amoah concluded, suggesting that the current inventories held by OMCs (Oil Marketing Companies) will likely be repriced to reflect the new global reality of a $90+ barrel.
The United States and Israel’s strikes on Iran are expected to spark a surge in oil prices when futures trading opens Sunday at 6 p.m. ET, experts warn.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies said early Sunday it would raise its daily output by 206,000 barrels a day after pausing incremental production increases earlier in the year. In the fourth quarter, OPEC boosted production by 137,000 barrels per day.
The production increase may somewhat blunt the expected surge in oil prices when the futures market opens Sunday evening, but energy analysts didn’t expect the production increases to do much to keep prices in check.
Oil prices have been rising in anticipation of an attack on Iran, and on Friday, Brent crude, the global benchmark, rose 2.9% to $72.87 a barrel.
But how much oil gains will depend on how long the military campaign might last and the conflict’s potential impact on the Iran-controlled Strait of Hormuz.
On Saturday, Trump posted on Truth Social that “heavy and pinpoint bombing … will continue, uninterrupted throughout the week or, as long as necessary to achieve our objective of PEACE THROUGHOUT THE MIDDLE EAST AND, INDEED, THE WORLD,” reaffirming earlier comments that the military campaign would be “massive and ongoing.”
Here’s what you need know about the oil market as the military conflict ensues.
Iran has major oil reserves
Iran plays a pivotal role in the global oil market. It is a major producer of oil, controls a vital shipping lane for crude and exports to oil-hungry nations such as China. The country also boasts the world’s third-largest proven oil reserves, according to OPEC.
