Media365
South Africa is preparing its largest expansion of strategic petroleum reserves in nearly five decades, reviving an energy security policy first adopted during the apartheid era as geopolitical tensions and supply risks reshape the global oil market.
The proposed build-up comes after renewed instability in West Asia, where the recent conflict involving the United States, Israel and Iran sent crude oil prices sharply higher and reignited concerns over disruptions to global energy supplies, particularly through the Strait of Hormuz.
According to a draft policy released by South Africa’s Department of Mineral Resources and Energy (DMRE) for public consultation on July 9, the country faces a shortfall of about 10 million barrels in its strategic petroleum reserves and plans to bridge the gap as part of a broader overhaul of its emergency oil stockpiling framework.
If implemented, the proposal would mark South Africa’s first major expansion of strategic crude reserves since the 1970s, when the apartheid government accumulated emergency oil stocks following United Nations sanctions that restricted its access to global crude supplies.
Targeting 60 days of emergency oil reserves
The draft policy proposes maintaining strategic petroleum reserves equivalent to 60 days of national demand, significantly strengthening the country’s preparedness for future supply disruptions.
Around two-thirds of these reserves would consist of crude oil, while the remaining one-third would be refined petroleum products.
Based on estimates from the US Energy Information Administration (EIA), South Africa consumes around 600,000 barrels of oil per day, implying a strategic reserve requirement of roughly 36 million barrels under the proposed framework.
The policy would also require licensed oil wholesalers and importers to maintain commercial inventories equivalent to 21 days of demand, creating an additional buffer alongside government-held emergency stocks.
Financing mechanisms under development
The draft policy states that South Africa’s National Treasury and the South African National Petroleum Company (SANPC) will jointly develop financing mechanisms and guarantees to fund the acquisition and maintenance of strategic petroleum reserves.
Authorities have not yet disclosed the estimated cost of the programme or the timeline for purchasing the additional crude.
The Department of Mineral Resources and Energy and SANPC did not immediately respond to requests for comment.
Saldanha Bay returns to strategic role
The centrepiece of South Africa’s emergency oil storage system is the 45-million-barrel Saldanha Bay terminal on the country’s Atlantic coast.
Built during the apartheid era in response to international sanctions, the facility was originally intended to shield the country from severe oil supply disruptions. Over the years, however, parts of the storage complex have been used for commercial purposes.
The latest policy seeks to restore the facility’s original strategic function as governments worldwide place greater emphasis on energy security amid rising geopolitical uncertainty.
Energy security moves up the policy agenda
South Africa’s proposal reflects a broader trend among energy-importing nations to strengthen strategic petroleum reserves as geopolitical tensions become a recurring source of market volatility.
Recent military escalation involving Iran and concerns over the security of shipping routes in the Gulf have highlighted the vulnerability of global oil supply chains, driving renewed interest in emergency stockpiles.
Strategic petroleum reserves are designed to cushion economies against sudden supply interruptions, stabilise domestic fuel availability and reduce exposure to sharp spikes in international crude prices.
For South Africa, whose economy remains heavily dependent on imported crude oil and refined fuels, the proposed reserve expansion represents one of the country’s most significant energy security initiatives since the end of the apartheid era.
The draft policy is now open for public consultation before the government finalises its long-term strategy for building and financing strategic petroleum reserves.
