Mbabane– Local businesses can expect a gradual stabilisation of supply chains and input costs over the next three to six months following the anticipated reopening of the Strait of Hormuz, according to Business Eswatini Chief Executive Officer E. Nathi Dlamini.
Speaking during an interview on Eswatini Tv Market View on Monday, Dlamini welcomed reports of a preliminary agreement between the United States and Iran aimed at easing tensions in the region and reopening one of the world’s most critical maritime trade routes.
“We are hugely excited about what has happened. It appears that cool heads have prevailed and there is now some semblance of an agreement. While it remains fragile, we are pleased because it means energy and fuel can begin flowing through the Strait of Hormuz again,” said Dlamini.
The Strait of Hormuz is a key global shipping corridor through which a significant share of the world’s oil and other commodities pass. Its disruption during the recent conflict between the United States, Israel and Iran contributed to rising fuel costs, supply chain bottlenecks and inflationary pressures across many economies, including Eswatini.
Dlamini revealed that one of the vessels detained during the crisis was carrying fuel destined for Eswatini, making the Kingdom one of the early casualties of the disruption.
“The damage has already been done. We have seen inflation rising, largely because of fuel prices and other commodities increasing. Fertiliser, much of which comes through the Strait of Hormuz, also became significantly more expensive,” he said.
The increased cost of imported inputs has placed additional pressure on businesses and consumers alike, with higher operating costs feeding into broader inflation across the economy.
While the reopening of the trade route is expected to bring relief, Dlamini cautioned against expecting immediate reductions in fuel prices or consumer costs.
“We estimate it could take between three and six months for international supply chains to normalise and for oil markets to fully respond. Consumers should still budget for higher prices over the next few months because the benefits will not be felt immediately,” he said.
According to Dlamini, businesses first need to experience lower input costs before any savings can be passed on to consumers.
He said the agricultural sector had been among the most concerned industries during the closure, given Eswatini’s reliance on imported fertiliser ahead of the upcoming planting season.
“I was particularly worried about what would happen when planting begins later this year if fertiliser supplies remained disrupted. The reopening offers some reassurance that the sector may avoid the worst-case scenario,” he said.
Looking ahead, Dlamini said the crisis highlighted the importance of strengthening the country’s energy security through strategic fuel reserves.
He welcomed ongoing efforts to establish strategic fuel storage facilities, arguing that larger reserves would cushion the economy against future global supply disruptions.
“At present, the fuel storage capacity available in the country lasts only about one-and-a-half to two days. If we had reserves capable of sustaining the country for three months, the impact of global shocks such as this would be significantly reduced,” he noted.
Dlamini said while Eswatini remains a price taker in international fuel markets, building adequate strategic reserves could provide valuable breathing room during future geopolitical crises and help protect businesses and consumers from sudden price spikes.
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