Crude Oil Could Hit $120, Threatening Cedi Stability

Rising geopolitical tensions in the Middle East could push global crude oil prices sharply higher and threaten the recent stability of the Ghanaian cedi, policy think tank C-NERGY has warned.

In its latest analysis, the think tank cautioned that the escalating conflict involving the United States, Israel and Iran could trigger significant disruptions in global energy markets, with major implications for economies heavily dependent on imported petroleum products such as Ghana.

According to C-NERGY, the tensions have already begun to affect global oil prices. As of Saturday, the global benchmark Brent crude was trading around $87 per barrel, representing an increase of about 8 percent within a single day amid fears of supply disruptions.

However, the think tank warned that prices could climb significantly higher if the situation escalates further.

Oil Could Surge to $120 or Higher

C-NERGY projects that crude oil prices could rise to $120 per barrel or even higher if shipments through the Strait of Hormuz are disrupted.

The narrow waterway bordering Iran is one of the world’s most important energy corridors, with roughly 20 percent of global oil and gas supplies passing through it.

Any prolonged disruption to shipping activities in the strait could significantly reduce global oil supply and drive prices upward.

The think tank noted that early signs of this trend are already visible in the market.

“Brent crude price jumped by about 10 percent between February 28 and March 2, 2026, following the initial days of the escalating conflict,” the report stated.

It added that prices could potentially reach $130 per barrel if the waterway were to be completely closed.

Implications for Ghana

For Ghana, rising oil prices could have immediate economic consequences.

Although Ghana produces about 180,000 barrels of crude oil per day, the country still depends heavily on imported refined petroleum products to meet domestic demand, according to the National Petroleum Authority.

C-NERGY estimates that more than 80 percent of the fuel consumed locally is imported.

This means that increases in global oil prices automatically raise the country’s fuel import bill. In 2025 alone, Ghana spent approximately $5.1 billion importing crude oil and petroleum products.

If global crude prices climb toward the projected $120 per barrel, the country’s import bill could rise significantly.

Pressure on the Cedi

Higher fuel import costs could also place pressure on the Ghanaian currency.

Oil importers must purchase US dollars to pay for petroleum shipments, which increases demand for foreign exchange in the local market.

According to C-NERGY, this surge in dollar demand could weaken the cedi if not carefully managed.

“Oil price hikes put upward pressure on demand for US dollars as this would drastically increase Ghana’s oil-related import bill,” the think tank explained.

This dynamic becomes particularly problematic during periods of global uncertainty, when the US dollar tends to strengthen across international markets.

Risk to Recent Currency Gains

The warning comes at a time when the Ghanaian cedi has experienced a period of relative stability following years of volatility.

However, C-NERGY stressed that external shocks, particularly from global energy markets, remain one of the biggest threats to sustaining that stability.

The think tank added that the overall impact on Ghana’s economy will also depend on how the prices of refined petroleum products move relative to crude oil prices.

If refined fuel prices rise faster than crude oil prices, the country’s import costs could increase even further.

Wider Economic Effects

Higher global oil prices typically translate into higher fuel costs, increased transportation expenses and broader inflationary pressures across the economy.

Although the conflict is unfolding thousands of kilometres away, its economic impact could quickly reach households and businesses in Ghana.

C-NERGY therefore believes developments in the Middle East will remain a critical factor for policymakers to monitor closely in the coming weeks.