SA fails to cash in as ships reroute around Africa

The US-Israel war on Iran is redrawing shipping routes overnight, sending vessels around Africa’s coast. NICHOLAS WOODE-SMITH warns, however, that as traffic surges, South Africa’s struggling ports, weak infrastructure and policy missteps threaten to turn a rare logistics opportunity into a costly failure.

South Africa has a lot to lose because of the ongoing war in Iran. As Israel and United States forces commit to airstrikes and possibly further military engagements with the Islamic Republic, South Africa is not safe from feeling the shocks of the war – even at the tip of Africa.

Oil

Since the first strike on 28 February, Brent crude prices have jumped by 15%. US President Donald Trump has given assurances that oil tankers will be escorted through the Persian Gulf, calming prices slightly. But fear remains that a shutting down of the Straits of Hormuz – and the destruction of key oil infrastructure in Iran and the Gulf States – will send oil prices skyrocketing as the war continues.

Increased oil prices will cause knock-on effects in South Africa, increasing the cost of living and raising inflation. Fortunately, a complete blockade of the Straits of Hormuz will not be an existential threat to South Africa’s oil supply, as we receive 75% of our oil from Nigeria and Saudi Arabia. Global prices, though, are likely to rise.

Eskom is still overly reliant on diesel generators to stave off loadshedding; increasingly expensive diesel will not help to keep electricity prices down.

Shipping

While the Persian Gulf and Red Sea look increasingly dangerous for overseas shipping, South Africa may enjoy an opportunity to absorb redirected traffic around the tip of Africa. Maersk and other global shipping companies have already announced that they will be making the trip around Africa rather than braving the Suez and Arabian Peninsula.

But this opportunity may already be squandered. South Africa’s port infrastructure ranks as some of the worst in the world, and we simply cannot adequately absorb the vessels that will be making the journey around the Cape. While partial privatisation of Durban’s port infrastructure has helped alleviate some of the problems, we need far faster and more effective privatisation of almost all our ports to expedite reform.

On top of this, we cannot guarantee the safety of ships passing around the Cape, as our Coast Guard struggles to even keep up with illegal fishing; our national waters effectively stand undefended against poachers, pirates and foreign countries.

MTN

MTN, Africa’s largest mobile network, is infamous internationally for its controversial Irancell contract. MTN’s deal to acquire a stake in Iran’s partly state-controlled telecommunications provider was fraught with corruption and accusations of MTN and South African officials promising to provide diplomatic cover for Iran’s nuclear weapons programme in exchange for accepting the contract.

MTN has already faced legal trouble due to the Irancell scandal, as well as being blocked from easy access to its Iranian revenue due to sanctions. The current conflict will further hurt MTN’s reputation and bottom line, while possibly causing spillover to other South African corporations.

Tourism

Tourism and air travel diminishes when global conflicts rise. Iran has attacked the Gulf States, targeting airports and air infrastructure. This will make residents of said countries reconsider travelling overseas on vacation.

South Africa generated R241 billion from tourism in 2024 alone. Many of these tourists were from the Gulf States – including high-spenders from oil rich countries. With travel becoming increasingly dangerous and global stability cracking, tourism will diminish and our economy will suffer.

Trade

South African trade with Iran is negligible. Exports to Iran were valued at $19.6 million in 2024 and dropped to $6.1 million in 2025. For comparison, South African exports to the United States in 2024 amounted to $12.4 billion. We do not purchase oil from Iran in any meaningful quantities.

Despite this puny trade relationship, the African National Congress (ANC) has prioritised bilateral relations with Iran – often at the expense of our relationship with the US. The US is our most lucrative trade partner, providing the country with tens of thousands of jobs and investing directly in our economy.

Yet, if the government continues to threaten relations with the US, its officials may finally remove South Africa from AGOA – a duty-free trade agreement that generated $3.6 billion for South African businesses and 62,000 jobs in 2022 alone.

The single biggest risk to South Africa that arises from the war in Iran has been the same risk that the Department of International Relations and Cooperation (DIRCO) has been toying with for years. Iran is an openly hostile regime to US interests, yet South Africa continues to provide diplomatic cover and moral support for the regime.

Political isolation

SA’s trade relations with the USA and the West in general have already been put under scrutiny by US officials questioning the ANC’s relations with Tehran. The ANC has reaffirmed its support for Iran’s theocratic regime despite the war – overtly choosing a side in what may become a global conflict.

Other members of BRICS – China and Russia – are more explicitly allies of Iran, and even they have not lifted a finger to save their friend. All the ANC’s signalling accomplishes is to further isolate itself from the world’s superpowers and risk fruitful trade relations.

President Cyril Ramaphosa is not helping the case by further acting like South Africa can act as a neutral mediator. His government has made it clear that it backs Iran in this conflict. Volunteering as a mediator is, frankly, just embarrassing at this point, and does not endear us to the USA or any other country.

It is clear from this conflict, and the effectiveness with which the US and Israeli airstrikes have crippled the regime, that South Africa is backing the losing side. But not just that. While paying lip-service to human rights, the ANC has clearly aligned itself with a regime that has one of the most horrendous human rights records in the world.

Earlier this year, tens of thousands of Iranian civilian protesters were slaughtered by government forces. The regime treats women as second-class citizens, ethnic minorities as pariahs, and operates a proxy network of terrorist organisations responsible for turning Yemen and Lebanon into failed states.

What we can do…

South Africa cannot stop this war. But we can decide how exposed we are to its shocks. That starts with treating energy and logistics as national resilience priorities. Government should accelerate port concessions and private participation across the system, cut red tape that delays infrastructure upgrades, and restore credible maritime security so the Cape route becomes an asset rather than a liability. At home, Eskom’s diesel dependency should be reduced through mass privatisation of the electricity industry.

Just as importantly, South Africa should stop converting foreign conflicts into self-inflicted economic wounds. The country has no strategic interest in signalling alignment with a sanctioned, authoritarian regime that offers negligible trade, while jeopardising access to major markets and investment. In a world of tightening blocs and rising risk premiums, South Africa’s foreign policy must serve South Africans first: protect jobs, protect market access and protect the credibility needed to grow.

• The original version of this article was first published by News24/CityPress on 8 March 2026