Crude oil prices have begun to dip after surging last Friday when Israel launched airstrikes on Iran in response to Tehran’s nuclear enrichment programme. The initial fear of a regional war pushed Brent crude up by 7%, reaching $74 per barrel. However, markets have since calmed, reassessing the likelihood of a broader escalation.
As of Monday, oil prices had eased to $73, indicating that traders expect tensions to remain contained for now. The Ghanaian cedi, which weakened from GH¢10.25 to GH¢10.35 per dollar on Friday, slightly recovered to GH¢10.30 by the start of the week.
Gold prices also retreated after a brief surge. The precious metal hit $3,432 on Friday as investors sought safety, but dropped to $3,395 on Monday, another sign that markets are pulling back from risk hedges. Meanwhile, oil shipments through the vital Strait of Hormuz, which handles up to 25% of global supply, continued without disruption.
So far, fears that major oil producers like Saudi Arabia could be pulled into the conflict have not materialised. Although Iran has launched retaliatory drone strikes, the worst-case scenarios have been avoided, at least for now. Still, shipping insurers are charging higher premiums for routes through the Middle East, reflecting ongoing uncertainty.
As a result, oil prices are expected to stay slightly elevated even without any major supply cuts until there is clear de-escalation. Despite OPEC+ members pumping above their production targets, global oil demand remains soft for the second half of 2025. This supply-demand balance is helping to keep prices stable.
JoyNews Research, in its weekend analysis, projected downward pressure on crude unless the conflict worsens. For Ghana, the easing of oil prices offers short-term relief. If prices had remained high, it would have increased fuel and transport costs, driven up food inflation, and added pressure on the cedi.
A joint decision by Ghana’s Energy and Finance Ministries to suspend the proposed GH₵1 per litre fuel levy also helped protect consumers from immediate price shocks.
However, the recent volatility exposes Ghana’s vulnerability to external energy shocks. The country lacks strategic fuel reserves, and efforts to rebuild them have stalled since the levy for funding such stockpiles was scrapped in 2006. According to a former BOST managing director, no significant moves have been made to restore this buffer.
In addition, the Tema Oil Refinery (TOR) remains underutilised, and crude oil production in Ghana has declined for five consecutive years. These structural weaknesses put the economy at risk every time oil markets fluctuate.
This close call should be a turning point. Ghana must prioritise energy security by rebuilding reserves, restoring refinery capacity, and ramping up local oil production. Without such measures, the country remains exposed to global market shocks.
Although oil prices are gradually returning to pre-conflict levels, Ghana is not out of danger. Until strategic safeguards are in place, the economy will remain highly sensitive to geopolitical disruptions, one major headline away from another fuel crisis.
