- South Africa plans to wait until oil prices reach $100 a barrel before selling more of its 7.7 million-barrel strategic crude reserves.
- The National Treasury anticipates 4 billion rand in revenue from crude sales by March 2026, but officials warn that low global oil prices may delay the sale.
According to a senior government energy official, South Africa will hold off on selling more of its strategic crude oil reserves until global prices rise to around $100 a barrel.
Since 2022, the South African government has planned to sell crude oil to recover funds to cushion consumers from soaring fuel prices. That year, authorities temporarily reduced the fuel levy, promising to replenish the shortfall through oil sales. At the time, Brent crude averaged about $99 per barrel.
However, oil prices have weakened recently, mainly due to concerns that trade tensions, particularly those linked to U.S. President Donald Trump’s trade policies, could trigger a global economic slowdown. Brent crude traded at approximately $66 a barrel on Wednesday, May 21.
Godfrey Moagi, CEO of the state-owned South African National Petroleum Company, told Reuters the country won’t rush to sell at low prices.
“If you sell today, you’ll just be emptying the tanks,” Moagi said. “We must sell at the right level to maintain our strategic stocks. We’re looking to sell at around $100 a barrel.”
The National Treasury expects to raise R4 billion ($223.2 million) from further crude oil sales during the fiscal year ending in March 2026. However, Moagi’s comments indicate that sales may not proceed unless global oil prices climb significantly.
In the 2023/24 fiscal year, the government received R2 billion from earlier oil sales, when Brent futures briefly approached $100 a barrel.
South Africa’s current strategic crude oil reserves are around 7.7 million barrels. Moagi confirmed that since 2022, the government has sold 2 million barrels to local petrochemical company Sasol and another 280,000 barrels to the South African unit of TotalEnergies.
The country stores these reserves through the Strategic Fuel Fund Association, a ring-fenced division under Moagi’s leadership.