Russia’s invasion of Ukraine has shaken the markets and geopolitics of energy, pushing oil prices to their highest levels in nearly ten years prompting many countries to reconsider their energy supplies. Russia is the world’s largest oil exporter to global markets, according to the International Energy Agency.
This conflict led to the United States, the European Union (EU) and several other countries imposing economic sanctions on the transcontinental nation and announced plans to wean themselves off Russian fossil fuels. The war has prompted political leaders to rethink their energy plans, which could profoundly impact the escalating food crisis and greenhouse-gas emissions.
The war has shown how vulnerable energy markets are. Scaling back will not be easy and will require countries to find or develop alternative sources, which requires technical, financial and geopolitical expertise, investment and collaboration.
“Nations will need to work with oil and gas companies to recreate the future of energy and how industry and consumers use energy. The largest independently-owned petroleum wholesaler and distributor, Royale Energy, is ready to help form part of the future of energy in the country,” says Royale Energy Director Mpho Dipela.
“The conflict invasion caused a short-term spike in prices but countries were able to release oil from their strategic reserves in an attempt to curb high prices. This indicates how essential it is for countries to have stock of strategic reserves.”
According to the law that regulates the Strategic Fuel Fund (SFF), South Africa must hold sufficient oil reserves to last the country up to 21 days.
Mineral Resources and Energy minister Gwede Mantashe in October this year told parliament that the country currently has 10 million barrels of crude oil in its strategic fuel reserves.
There has been minimal growth in the domestic supply of raw petroleum products over the past ten years while demand has continued to increase, according to a Norton Rose Fulbright South Africa Incorporated report. This along with the country’s economic expansion has seen a significant increase in imports of both crude oil and refined products.
“In South Africa we rely on the importation of crude oil and refined fuels to meet our needs, importing almost 90% of our crude oil. According to the Fitch South African Oil and Gas report, South Africa has limited crude oil reserves so growth in oil production is set to remain inactive.”
“Royale has invested heavily in gas and oil in recent months, with our goal set to become one of the most recognisable African players in this market. We aim to bring value to the sector as we are committed to providing reliable energy.”
“Seeing this demand and understanding the need for investment in fuel storage capacity is why Royale chose to invest in our own storage facilities. Currently our storage division of the Royale Energy Group, Royale terminals comprises of two terminal depots based in Klerksdorp and in Langlaagte in Johannesburg with 15,703 million litres and 8,216 million litres of operational capacity respectively,” adds Dipela.
“Royale believes that building long-term resilience and agility in the energy system is crucial for South Africa. It is essential to prioritise fuel delivery for our supply chain despite the market volatility.”
“As an African energy leader, we are focused on overcoming supply chain issues. Building resilience requires operators like us to create integrated and efficient approaches to reduce risks. This is the reason that we have complete ownership of our structure including storage capacity. Royale Energy has invested in a fuel distribution network to create a wide supply chain which assists in our ability to provide oil within the country.”
“As the oil sector continues to develop and evolve we believe we are positioned perfectly to not just grow exponentially but to take advantage of opportunities to develop our supply chain even further.”
