South Africa has confirmed it will not sell more of its strategic crude oil reserves until global prices climb closer to $100 per barrel, a move aimed at maximizing returns while maintaining energy security.
Speaking to Reuters, Godfrey Moagi, CEO of the South African National Petroleum Company (SANPC), stated:
“The oil price is too low, so if you sell today you are going to empty the tanks. We have to sell at the right level to ensure we still have strategic stocks.”
🛢️ Context: A Price-Driven Strategy
South Africa began considering crude sales in 2022, when the government temporarily cut fuel levies to cushion consumers from soaring prices. That relief was meant to be offset by revenue from selling oil reserves, with Brent crude averaging $99/barrel that year.
Now, with Brent crude around $66/barrel, officials have paused further sales, awaiting a more favorable market.
💰 Fiscal Goals vs. Market Conditions
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The National Treasury projected 4 billion rand (~$223 million) in crude sale revenue by March 2026.
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But Moagi’s comments suggest sales will not proceed unless prices recover to $100/barrel.
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The last major transfer of revenue, 2 billion rand, occurred in FY 2023/24, when Brent briefly neared $100 again.
🛢️ Current Reserve Levels
South Africa holds approximately 7.7 million barrels in its Strategic Fuel Fund, a dedicated unit under SANPC.
Since 2022, around:
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2 million barrels were sold to Sasol
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280,000 barrels went to TotalEnergies’ local unit
These transactions occurred at relatively high price points to ensure favorable returns.
🌍 Why It Matters Globally
South Africa’s decision adds to the broader narrative of how countries are managing energy reserves amid global volatility, including:
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Geopolitical risks in the Middle East
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Trade wars and their impact on demand
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Fluctuating fuel prices driven by economic slowdowns and central bank policies
🏦 Quote from the Top
“We are looking to sell at around $100 a barrel,” said Moagi, underlining the government’s price-conscious approach to reserve sales.
