Oil Shock Sends Markets Reeling: JSE Down 13%, Rand at R17.11/$ as War Intensifies

Global financial markets continue their downward correction as geopolitical turmoil sends oil prices soaring.

The Oil Shock

In January 2026, the World Bank and IMF projected a “commodity glut” with prices falling toward $60/barrel.

Instead, current geopolitical escalations have pushed Brent crude back above $100–$114/barrel.

The sudden price surge has shifted investor sentiment from “soft landing” optimism to risk-off defensive positioning.

Global Markets

European bourses (FTSE 100, DAX) declined 5%–7% due to high energy import reliance.

The S&P 500 saw more modest drops around 2.5%.

The IMF warns that a sustained 10% increase in energy prices could raise global inflation by 40 basis points.

This has stoked fears of “higher-for-longer” interest rates, causing bond yields to climb. South African 10-year yields hit 8.8% .

The JSE

The JSE ALSI lost 5.8% over the last seven trading days.

At the close last Friday, it was 17,756 points downor 13.28% from its record level of 128,455 to 110,070.

Precious Metals

The sharp decrease in precious metals prices contributed to a sharp decrease in Resources and precious metal equity prices.

• Gold: Dropped sharply by $534 per ounce or 11.0% last week

• Platinum: Dropped 9.3%

This pushed the precious metals and mining sector index down by 11.8% .

The Rand

The sharp decrease in precious metals prices and the sell-off of shares and bonds by foreigners had a devastating effect on the rand.

• USD: Depreciated another 16 cents to R17.11/$ 116 cents weaker than R15.95 on the day of the first US/Israel attack on Iran

• Pound: Lost 44 cents to R22.85/£ 138 cents weaker

• Euro: Depreciated 44 cents last week to R19.84/€ 104 cents weaker

Inflation Reality Check

StatsSA announced last week that South Africa’s inflation rate was 3.0% in Februarythe lowest since June last year and on the Reserve Bank’s 3% target.

However, given expected sharp increases in fuel prices (30%) and electricity prices (9.5% for consumers) on 1 April, inflation is forecast to increase by between 1.5% and 2.0% over the next three months.

Last Thursday, petrol was already under-recovered by 519 cents per litre and diesel by 852 cents per litre. Fuel price will also increase by another 21 cents per litre due to increased fuel taxes.

The Week Ahead

The Monetary Policy Committee (MPC) of the Reserve Bank will announce its interest rate decision at a press conference on Thursday.

Although inflation came down to 3.0% in February, the expected inflation rate that will be used in the Bank’s Quarterly Projection Model (QPM) will reject any changes of lowering the repo rate.

It is not expected that the Bank will increase interest rates at this meeting, but it may give indications of when it will have to hike the repo rate.

The Bottom Line

Oil at $114. JSE down 13%. Rand at R17.11. Inflation set to spike.

The Reserve Bank meets this week. The war in the Middle East continues. And markets are holding their breath.

{Source: IOL}

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