International energy markets have been jolted into crisis after a complete shutdown of the Strait of Hormuz, a development that has pushed crude oil prices beyond $91 per barrel.

On Saturday, February 28, the Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, cautioned that the abrupt intensification of tensions in the Middle East has effectively crippled the world’s main oil route, with immediate and serious implications for fuel costs in Ghana.

He painted a grim picture of a worsening crisis in which diplomatic engagement has given way to a tense naval face-off.

According to him, the closure is being carried out by a coordinated bloc he identified as the Iron Triangle.

He confirmed that the naval forces of Iran, Russia, and China have been positioned to shut down the strategic passage, a channel responsible for transporting a large share of global energy supplies.

“What I can confirm is that the Strait of Hormuz is blocked as we speak,” Mr Amoah stated in Channel One. “The iron triangle is already active. Iran, Russia and China have paraded their maritime infrastructure. Whatever they can deploy in that tunnel is already active. The US is also heading toward that corridor, which means no oil whatsoever has made passage since morning.”

Price shock: From $67 to $91 in 24 hours

Oil prices reacted sharply and immediately. Prior to the recent military escalation, which reportedly involved U.S.-Israeli strikes and claims surrounding the death of Iran's Supreme Leader, crude had been trading steadily between $67 and $69, but by Saturday afternoon the market had shifted dramatically.

Amoah indicated that trading patterns now point to a jump exceeding 30 percent within just one day.

“Over 22 percent of the global oil supply that should have moved since last dawn has not moved. Inventories across Europe, the US and Asia will now attract higher premiums. You cannot expect anyone holding oil at this point to sell it cheaper,” he explained.

Implications for the Ghanaian consumer

Ghana, which is already grappling with economic pressures outlined in the President’s recent State of the Nation Address (SONA), now faces the likelihood of rising inflation with crude hovering at $91 per barrel.

COPEC maintains that given the unpredictable nature of the standoff, fuel prices at the pumps could soar unless U.S. naval forces succeed in reopening the vital shipping lane.

The additional geopolitical premium on oil has climbed to levels not seen since the 2022 invasion of Ukraine. Emirates flights departing from Accra have already been suspended because of restricted airspace, while the Ministry of Foreign Affairs has cautioned against travel to the affected area, deepening concerns that instability in the Middle East could quickly spill over into Ghana’s domestic economy.

Mr Amoah offered a cautious outlook on what lies ahead. With U.S. carrier strike groups advancing toward the disputed waters, the possibility of a broader naval clash remains high.

“The situation is fluid and not looking very kind,” Mr Amoah concluded, suggesting that the current inventories held by OMCs (Oil Marketing Companies) will likely be repriced to reflect the new global reality of a $90+ barrel.

Meanwhile, President John Dramani Mahama’s pledge to revive Ghana’s premier crude oil processing facility, the Team Oil Refinery (TOR) has been fulfilled.

After several years of inactivity, management of Tema Oil Refinery has announced the resumption of operations. The resumption has become possible following the completion of extensive Turnaround Maintenance (TAM) works on the refinery’s Crude Distillation Unit (CDU). Maintenance works on began on August 1 and October 30 this year. This information was contained in a press statement released by the management on Saturday December 27.

TOR’s resumption is expected to boost energy security, industrial growth and national development, potentially saving Ghana up to $10.2 billion in oil import bills annually.

Tema Oil Refinery halted its operations in 2018 citing lack of crude oil which serves as a raw material in maintaining the refinery. Other factors that influenced the closure include broken equipment, piled debt, among others.

Addressing party delegates in 2023, President Mahama assured the creation of jobs through the revamping of the refinery.

He pledged to revive the Oil Refinery to its former glory which he claimed was collapsed by the then Akufo-Addo government.

“Since we (NDC) left office, TOR has never processed crude oil again. I remember before we left office, we sent to TOR the first batch of Ghanaian crude oil from our own oil fields for TOR to process. That oil sat there for several years, eventually, they discounted the oil and sold it out without processing it. I can assure you, when NDC comes back, TOR will stand on its feet again”, he noted.

In June, this year, Managing Director of TOR Mr. Edmond Kombat has revealed refinery operations will commence in October.

He informed the Parliamentary Committee on Energy on Sunday, June 22, when he briefed the committee on the leadership's mandate, work plans for the year 2025, and their operational challenges.

The engagement forms part of the committee’s oversight responsibility of the agencies under the Ministry of Energy and Green Transition.

In his submission, Mr. Edmond Kombat indicated that TOR will continue with the gantry and terminal upgrade.

He noted that the current leadership will also complete ongoing projects commenced by the previous administration as well as work on their debt and financial restructuring as well as retooling of their laboratory.

He noted that the refinery was wallowing in debt worth $517 million after being inactive for the past four years. The current debt is as of December 2024.

The Managing Director said: “There were times that the Ministry of Finance in the past had given some funds to TOR and some of it, for example, was grants and then when they entered into the agreement with the IMF, the IMF asked them to reclassify it as debt.

“So, those things have accumulated to that amount of money and I think the last time TOR traded, some of the trades were not hedged,” he said.

“We are doing that verification and once we do that verification and authentication of what we have been able to bring down, that will be communicated publicly,” Mr. Edmond Kombat.

According to him, for the past 6 months, TOR had not audited its financial accounts.

The Managing Director made a special appeal to the parliamentary committee to help them resolve some of their challenges.

They include restructuring of their debts with the ESLA receivables, converting GOG debts into equity,reinstating the TOR portion of the ESLA Levy, allowing TOR to participate in the primary distribution margin, and giving TOR a representation on the Laycan Committee, among others.