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Economist Bheki Mahlobo has told The Common Sense, “While the end of the conflict will not solve South Africa's deeper growth problems, it could provide some relief to consumers after months of higher energy costs and inflation concerns.”

Mahlobo says that relief will start with what is likely to happen in the oil market.

During much of the conflict, oil traded near $100 per barrel as markets feared prolonged disruptions to supply through the Strait of Hormuz. However, oil prices have already fallen sharply as expectations of a peace deal have strengthened. Brent crude is now trading at around $83 per barrel, having fallen to its lowest level in several months as markets price in the reopening of Hormuz and the return of Iranian exports.

Mahlobo expects that if the Strait of Hormuz reopens fully and global oil flows normalise, the oil price could fall further into a range of between $65 and $73 per barrel by the end of the year.

That would translate into meaningful savings for South African motorists.

Based on his forecasts, petrol prices could decline into a range of between R21 and R23 per litre by year end, roughly 20% below current levels. Lower fuel prices would not only reduce transport costs for households but would also ease pressure on businesses across the economy.

As a consequence, the inflation outlook would improve.

Mahlobo says that consumer inflation is expected to continue rising in the near term as earlier fuel price increases and electricity tariff adjustments continue to feed through the economy. However, he expects inflation to peak at around 5% during July or August before beginning a gradual decline.

As fuel prices fall and global energy markets stabilise, inflation is expected to return to around 4% by the end of the year. Such an outcome would place inflation on the upper fringe of the South African Reserve Bank's target range of 3%.

Lower inflation would influence interest rates.

Much of the recent hawkish tone from central banks around the world has been driven by concerns that higher energy prices could trigger broader inflationary pressures. If oil prices continue to decline, those concerns will ease, relieving pressure on South Africa's own central bank.

Mahlobo therefore expects the South African Reserve Bank to implement one further 25 basis point increase in July before holding rates steady through the remainder of the year.

For households, that combination of lower fuel costs, moderating inflation, and a more stable interest rate environment would represent some relief in economic conditions.

The longer-term growth picture, however, remains far less encouraging.

While the end of the Iran conflict may improve the global environment, Mahlobo said, “South Africa's weak growth performance is driven primarily by domestic factors rather than international ones. Low levels of investment, infrastructure constraints, regulatory uncertainty, and policy choices continue to weigh on business confidence and economic expansion.”

As a result, the end of the Iran war is likely to bring some relief to consumers and households, but it will do little on its own to lift South Africa's long-term growth trajectory.