SA seeking $100 a barrel oil before selling its crude stocks

SA will wait for global oil prices to rise to about $100 (about R1,790) a barrel before selling more of its strategic crude reserves, according to Godfrey Moagi, CEO of state-owned SA National Petroleum Company.

The country has been looking to sell crude since 2022, when the government cushioned consumers from high petrol and diesel prices by temporarily cutting a fuel levy on condition that the revenue would be recouped by selling oil from the strategic reserves. Brent crude averaged $99 a barrel that year.

Global crude prices have taken a hammering in recent weeks, hurt by worries that US President Donald Trump’s trade war could push economies about the world into recession. Brent was trading about $66 a barrel on Wednesday.

“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 make sure we still have strategic stocks,” Moagi told Reuters.

“We are looking to sell at about $100 a barrel,” he said.

The National Treasury is expecting to receive R4bn from the sale of more crude oil from the country’s strategic reserves in the fiscal year that ends in March 2026, but Moagi’s comments suggest that may not happen unless global oil prices rally.

Following the levy cut in 2022, R2bn was transferred to the government in the 2023/24 fiscal year, which was when Brent futures last traded close to $100 a barrel.

SA’s current strategic crude reserves are estimated at roughly 7.7-million barrels. Since 2022, 2-million barrels have been sold to local petrochemical firm Sasol and another 280,000 barrels to the local unit of France’s TotalEnergies, Moagi said.

The strategic reserves are held by the Strategic Fuel Fund Association, a ring-fenced unit of the company Moagi leads.

Reuters