Iran-Israel Tensions Pose Limited Risk to Ghana’s Oil Revenue and Reserves, Says Dr Theo Acheampong
Ghana faces limited fiscal and macroeconomic risk from the ongoing Iran-Israel conflict (although both countries are currently under a ceasefire) due to easing oil prices, improved foreign exchange buffers, and prudent expenditure controls, according to Petroleum Economist and Political Risk Analyst, Dr Theo Acheampong.
Speaking during the NorvanReports and Economic Governance Platform (EGP) X Space discussion titled “Oil Wars, Broken Systems: What The Iran-Israel Conflict Really Means for Ghana’s Revenue, Reserves & Reform Path”, Dr Acheampong stressed that while the world is experiencing “more persistent conflict” and shorter intervals between major geopolitical shocks, the current Middle East crisis is unlikely to cause severe dislocation to Ghana’s economy.
“Whereas you were looking at a major global event every five to eight years, we’re now seeing them every two or so years – the COVID-19, the Russia-Ukraine war, Iran-Israel tensions. But the oil market has largely priced in the current conflict, and the ceasefire appears to be holding,” he said.
Oil Prices Dip Amid Ceasefire Optimism
Brent crude is currently trading around $68 per barrel, down from a short-term spike of nearly $80 in the early days of the conflict. Dr Acheampong noted that this is well below the highs recorded during the Russia-Ukraine crisis in early 2022, when oil soared above $140 per barrel.
“The futures market doesn’t expect the Iran-Israel conflict to escalate significantly, and critically, major energy infrastructure in Iran has not been targeted,” he observed.
This relative calm in global energy markets, he added, is “positive for a net oil importer like Ghana,” which spends more on petroleum imports than it earns from crude exports. The government’s 2025 budget was based on an oil benchmark of $74.70 per barrel. Should current prices persist, Ghana could see lower-than-expected oil export revenues, but also a notable decline in its import bill.
“While our crude entitlement earnings may drop slightly, lower prices on the import side mean we could actually save more. Citizens could then benefit at the pump, provided the cedi remains stable and no new petroleum taxes are introduced, ” Dr Acheampong stated.
Ghana’s import bill is dominated by petroleum products, with oil-related imports accounting for a significant portion of the $17 billion annual spend, according to Bank of Ghana data.
Multiple Transmission Channels, Yet Limited Current Impact
Speaking further during the X Space discussion, Dr Acheampong identified five key transmission channels through which geopolitical shocks affect Ghana’s economy: global trade disruption, commodity price volatility, exchange rate pressures, financial market instability, and imported inflation.
He stressed that while these risks are real, their impact has so far been muted. “This time is different. The country has built better buffers in the form of gold reserves, improved fiscal controls, and more cautious spending,” he stated.
He also pointed out that while gold prices have surged above $3,000 per ounce – a safe-haven response to geopolitical tension – this benefits Ghana as a gold-exporting nation.
Cautionary Note on Medium-Term Reforms
Despite his relatively bullish short-term outlook, Dr Acheampong warned against complacency.
“This crisis underscores the urgency of fixing structural weaknesses in Ghana’s energy sector as well as the need for broader diversification of the economy. You can’t shield yourself entirely from global shocks unless domestic buffers are strong and institutions function properly,” he stated.
He concluded by highlighting that the nation’s response to short-term volatility has improved, but emphasized that the deeper reforms needed to address energy sector inefficiencies and diversify the economy remain outstanding.
