In February 2022, at the onset of the Russian invasion of Ukraine, Brent crude had surged to nearly $100 per barrel, its highest level in seven years at the time, raising fears of imported inflation for oil-dependent economies like Ghana.
Ghana experienced sharp increases in fuel prices and general goods and services.
The economic strain intensified, contributing to currency depreciation, rising inflation and broader fiscal instability.
Today, history appears to be knocking again. Brent crude recently climbed to $100 per barrel, the highest since 2024, following renewed geopolitical tensions involving Iran and the US.
Any direct confrontation affecting Iran immediately unsettles oil markets because of its role in global energy supply and its strategic position along the Strait of Hormuz, a key route for a significant portion of global oil shipments.
What it means
Ghana produces crude oil domestically from offshore fields, such as, Jubilee and TEN. However, despite being a crude producer, the country depends heavily on imports of refined petroleum products, including petrol, diesel and aviation fuel.
The Tema Oil Refinery (TOR) has a design refining capacity of approximately 45,000 barrels per day (bpd). However, recent operational levels have been closer to about 28,000 bpd, which is below its full installed capacity.
Meanwhile, Ghana’s total petroleum consumption is estimated at roughly 102,000 barrels per day.
This means local refining currently covers only a fraction of national demand, leaving a significant supply gap that must be filled through imports.
Because Ghana sources a substantial portion of its refined petroleum products from Europe and parts of the Middle East, any global oil price increase or shipping disruption would likely result in higher fuel import costs, increased pump prices, rising transport costs, broader inflation across food, essential goods and additional pressure on the cedi.
Risk
Under the administration of PredidentJohn Mahama, Ghana has been implementing stabilisation measures, including IMF-backed reforms aimed at restoring macroeconomic confidence.
Recent improvements in inflation moderation and relative exchange rate stability suggest a gradual recovery.
However, a renewed spike in oil prices could expand Ghana’s fuel import bill, widen the current account deficit, and increase pressure on foreign exchange reserves.
Trigger renewed depreciation of the cedi, complicating fiscal consolidation and debt restructuring efforts.
In short, Ghana’s recovery remains vulnerable to external oil shocks.
Partnerships?
Regional energy cooperation may provide some relief.
The Dangote Refinery in Nigeria, one of Africa’s largest refining facilities, has the capacity to significantly supply refined petroleum products within West Africa.
If Ghana secures reliable supply arrangements, it could benefit from: reduced freight and insurance costs, shorter supply chains, improved regional trade settlements and lower exposure to disruptions in distant shipping routes.
Angola commenced the supply of sweet Palanca crude oil to Ghana via the Sentuo Refinery in May 2025.
Further strengthening bilateral energy ties with Angola, one of Africa’s leading crude producers, could diversify Ghana’s sourcing arrangements and enhance supply security.
However, while such partnerships may reduce logistical and supply risks, they do not eliminate Ghana’s exposure to global benchmark pricing.
Oil is traded internationally using benchmarks, such as, Brent crude; therefore, if global prices rise due to geopolitical tensions, Ghana will still face higher import costs regardless of the source.
While Ghana cannot control global conflicts, it can manage its vulnerability through prudent policy actions by strengthening foreign exchange buffers, maintaining adequate reserves to manage exchange rate pressure, scaling up TOR Operations by increasing refining efficiency toward its 45,000 bpd capacity, which would reduce import dependence.
Broader sourcing agreements reduce concentration risk and expand strategic petroleum reserves.
Emergency fuel stockpiles can cushion temporary disruptions, promote energy diversification, expand renewables and alternative transport systems to gradually reduce petroleum reliance, and maintain fiscal discipline by avoiding excessive spending during volatile periods to preserve macroeconomic stability.
The writer is the executive director,
Women in Energy, Oil and Gas Ghana (WEOG – Ghana)
Source:
www.graphic.com.gh