The Korea Times
CAPE TOWN—The global fallout from the Iran war demonstrates once again that for investors, fossil fuels are not just another commodity exposure, but a geopolitical liability. Oil and gas prices have always been structurally unstable, such that supply disruptions anywhere can trigger sudden economic shocks everywhere. And because oil sits at the center of the global energy system, volatility spreads quickly through the financial system. The consequences are particularly acute for African economies, whose currencies come under pressure whenever oil prices surge. Every additional dollar per barrel increases import costs and tightens foreign-exchange constraints. The South African rand, the East African shillings, and many other currencies bear the brunt of the shock. The same dynamic then exposes a deeper problem for banks and institutional investors. Although financing for fossil fuels is often framed as a way of supporting energy security or economic development, it often produces the opposite effect, entrenching dependence on a volatile global commodity whose price responds to confli
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