Middle East tensions threaten domestic energy security - ASEC

Rising geopolitical tensions in the Middle East could significantly undermine Ghana’s energy security and place additional pressure on the country’s economy if global crude prices surge, the Africa Sustainable Energy Centre (ASEC) has warned.

In a policy brief issued by its Executive Director, Justice Ohene-Akoto, the think tank cautioned that the ongoing conflict involving the United States, Israel and Iran is already creating turbulence in global oil markets and may push crude prices to as high as US$120 per barrel if the crisis persists.

The centre noted that Iran’s strategic position within the Organization of the Petroleum Exporting Countries (OPEC), combined with potential disruptions to vital shipping routes such as the Strait of Hormuz, could significantly constrain global oil supply.

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ASEC said any escalation that threatens the Strait of Hormuz through blockades, military activity, or heightened security risks would sharply increase transportation and insurance costs for petroleum shipments, with direct implications for oil-importing countries such as Ghana.

It further warned that vulnerabilities in the Middle East’s production infrastructure, including that of Saudi Aramco, the state-owned oil giant of Saudi Arabia, could tighten global supply even further.

According to ASEC, Ghana remains particularly exposed because of its heavy reliance on imported refined petroleum products.

“Energy security is about supply, affordability and resilience and right now, all three are under threat,” he said.

The brief identified several structural weaknesses in the domestic energy sector, including an overreliance on imported fuels, limited strategic petroleum reserves, and the absence of a comprehensive emergency energy response framework.

It also warned that industries dependent on heavy fuel oil and natural gas, particularly manufacturing, could face production disruptions, job losses and reduced output if supply constraints intensify.

To cushion consumers in the immediate term, ASEC urged the government to deploy revenue from the existing GH¢1 fuel levy as a targeted buffer against rising pump prices.

The centre also called for urgent diplomatic engagement with African oil-producing countries, including Nigeria, the Republic of the Congo and Algeria, to secure alternative supply arrangements and reduce reliance on Middle Eastern sources.

In the medium term, ASEC recommended that Ghana expand its strategic petroleum reserves and increase storage capacity to protect the economy against prolonged supply shocks.

ASEC further advised the government to renegotiate royalty and revenue-sharing agreements with international oil companies to secure more favourable returns from Ghana’s hydrocarbon resources.

The brief also emphasised the need to incorporate force majeure provisions into energy supply contracts to ensure that unforeseen geopolitical disruptions can be managed within a clear legal framework.

Looking ahead, ASEC urged authorities to prioritise the rehabilitation and expansion of the Tema Oil Refinery, describing domestic refining capacity as critical to reducing dependence on imported petroleum products.

However, the centre cautioned against a rapid exit from hydrocarbons, recommending instead a hybrid energy transition strategy that balances continued use of oil and gas with a gradual expansion of cleaner energy technologies.

“Targeting a country’s energy infrastructure is one of the most effective ways to undermine its stability and sovereignty,” the report stated, noting that energy security must be treated as a core national security priority.

ASEC said the current crisis should serve as a catalyst for structural reforms aimed at building a more resilient and self-reliant energy system for Ghana.

SP/MA

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