The Institute of Risk Management South Africa (IRMSA) warns that the escalating conflict between Iran, the United States and Israel present material systemic risks to South Africa’s economy, fiscal stability, and business resilience.
The Strait of Hormuz carries approximately 20 percent of global oil supply. Any sustained disruption to that corridor could trigger sharp energy price volatility. For an import dependent economy such as South Africa, this translates into immediate inflation risk, currency pressure, and heightened financial market instability.
Yvonne Mothibi, Chief Executive Officer of IRMSA, says the conflict should be treated as a high probability external shock scenario rather than a distant geopolitical event: “Risk professionals understand that interconnected systems transmit shocks rapidly. A spike in oil prices combined with global risk aversion could weaken the rand, increase input costs, place strain on transport and food supply chains, and complicate the inflation outlook. South Africa remains structurally exposed to global energy volatility.”
IRMSA warns that rising oil prices would not only affect consumers at the petrol pump but could undermine fiscal assumptions underpinning the 2026 Budget. Higher fuel costs increase the risk of inflation persistence, which may limit monetary policy flexibility and place renewed pressure on economic growth.
The Institute also highlights reputational and geopolitical risk following recent joint naval exercises involving Iran, Russia, and China off South Africa’s coastline.
In a period of heightened international tension, such engagements may influence trade relationships and investor confidence.
“Geopolitical alignment risk is real,” says Mothibi. “Markets respond not only to policy but to perception. In an environment of hardening alliances, strategic uncertainty can translate into capital flow volatility and trade sensitivity.
IRMSA identifies five immediate risk categories for South Africa:
- Energy price shock and second round inflation effects
- Currency depreciation linked to global investor risk aversion
- Supply chain disruption across manufacturing, food, and transport sectors
- Fiscal vulnerability if growth assumptions weaken
- Reputational and diplomatic exposure affecting foreign direct investment
The Institute urges boards, risk committees, and policymakers to activate scenario testing and stress modelling across critical sectors. Businesses with Middle East exposure should review contingency planning, liquidity buffers, and crisis communication protocols.
IRMSA is also concerned for South African professionals working in the Gulf region, including the United Arab Emirates, and neighbouring states. Employers are encouraged to reassess evacuation plans, insurance coverage, and employee safety protocols.
“Resilience is built before the crisis peaks. South Africa must strengthen energy diversification, deepen supply chain visibility, and reinforce governance oversight. Systemic risk requires coordinated, disciplined leadership.”
IRMSA says it stands ready to support the country’s risk community and business leaders in navigating this period of heightened global uncertainty.
