Energy stocks came under heavy pressure on the JSE on Wednesday, with Sasol shedding about R18bn in market value after a tentative ceasefire agreement between the US and Iran that eased geopolitical tensions and sent oil prices sharply lower.
After losing as much as 20% during the day, Brent crude was down about 13% just after market close to $95 a barrel, while the rand strengthened more than 2.8% against the dollar. That combination weighed heavily on Sasol, given its sensitivity to oil prices and the exchange rate, and its stock fell more than 12%.
Sasol had gained about 9% on Tuesday as traders bet the war on Iran could push oil prices even higher. But sentiment quickly turned on Wednesday after the White House announced a two-week ceasefire between Washington and Tehran, easing immediate fears of a deeper conflict that could further disrupt global energy markets.
The ceasefire, announced shortly before US President Donald Trump’s latest deadline to Tehran, is expected to create space for negotiations over a broader settlement of the conflict. A key development for markets was the expected reopening of the Strait of Hormuz, the vital shipping route through which about a fifth of the world’s oil exports pass.
Citadel Global director Bianca Botes said that markets are now focused on whether the truce will hold.
“The sustainability of the ceasefire now becomes critical, as any breakdown in negotiations can send markets back into a risk-off environment,” she said.
The weakness extended beyond Sasol, with coal producers also dragged lower. Thungela fared worst on the JSE on the day, falling 12.53% to R149.57 — the most in about three years. Exxaro Resources, which is not purely a coal player, shed 1.34% to R223.02.
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