SAPICS warns of soaring fuel prices, shipping disruptions, and insurance risks impacting consumers across Africa
The ongoing conflict in Iran is increasingly disrupting global supply chains, forcing businesses to raise prices as fuel costs surge. Companies across Africa are particularly vulnerable, with transport expenses already forming a large share of consumer prices.
Disruptions to energy markets, maritime shipping routes, and logistics insurance are driving up the cost and complexity of moving goods. According to SAPICS, these pressures inevitably filter down to consumers.
“Supply chains are highly interconnected global systems,” explains SAPICS president Thato Moloi. “When geopolitical tensions affect major energy corridors or shipping routes, the consequences travel quickly through logistics networks and ultimately reach businesses and consumers everywhere.”
One of the most immediate impacts is volatility in global oil and diesel markets. Diesel powers trucks, freight rail, port equipment, and agricultural machinery. Rising diesel prices, therefore, translate directly into higher logistics costs.
For African economies, the effect is especially severe. “Higher fuel prices increase the cost of every kilometre travelled by a transporter,” Moloi notes. “That cost moves through the entire supply chain and eventually shows up on store shelves.”
From food and consumer goods to construction materials, rising logistics costs ripple through economies, fueling inflation. Analysts warn that anticipated interest rate cuts in South Africa may be delayed due to inflationary pressures linked to oil price spikes.
The conflict is also reshaping global maritime routes. Shipping companies are rerouting vessels around the Cape of Good Hope instead of using the faster Trans-Suez route, adding time and costs. Many carriers are also imposing surcharges for “war risks” and “emergency conflicts.”
“For supply chain managers, longer routes mean longer lead times, higher fuel consumption, and increased freight costs,” Moloi adds. “Global shipping schedules, already strained, could become even less predictable.”
Insurance risks compound the challenge. War-risk premiums for vessels in high-risk areas have surged, with marine hull insurance rates in the Gulf reportedly rising by 50%. Insurers are issuing cancellation notices within 48 to 72 hours to reassess exposure and adjust premiums, adding further uncertainty for businesses and consumers.