Safeguarding Ghana's Energy Security Amid Global Geopolitical Tensions: Recommendations to the Government of Ghana from the Africa Sustainable Energy Centre
Executive Summary
The ongoing military conflict involving the United States, Israel, and Iran has introduced significant turbulence into global energy markets, with direct implications for Ghana and the wider African continent. Iran's prominent role within the Organisation of the Petroleum Exporting Countries (OPEC), combined with strategic disruptions to critical maritime routes such as the Strait of Hormuz, has created a volatile environment for oil supply and pricing.
The Africa Sustainable Energy Centre (ASEC) urges the Government of Ghana to treat this moment as a defining opportunity to address deep structural vulnerabilities in the country's energy sector. This brief outlines the nature of the current crisis, its projected impact on Ghana, and a set of targeted recommendations across the short-, medium-, and long-term.
Energy security is about supply, affordability and resilience—and right now, all three are under threat." —Justice Ohene-Akoto, Executive Director, ASEC
Background: The Geopolitical Crisis and Its Energy Implications
The armed conflict in the Middle East has triggered a chain of consequences that extend far beyond the war. Several factors combine to create an acute risk for oil-importing nations like Ghana:
Disruption to OPEC Supply
Iran is one of the most consequential members of OPEC, contributing a substantial share of the cartel's overall production capacity. Armed conflict involving Iran creates immediate supply uncertainty, which puts upward pressure on global crude oil prices.
The Strait of Hormuz
A significant volume of the world's oil, including supplies destined for African markets, transits through the Strait of Hormuz. Threats to the security of this waterway, whether through blockades, attacks, or military escalation, restrict the flow of petroleum products and drive up transportation and insurance costs for importers.
Damage to Saudi Arabian Production Infrastructure
Aramco, the state-owned energy giant of Saudi Arabia and one of the world's largest oil producers, has reported exposure to the effects of the conflict through infrastructure vulnerability. Any sustained disruption to Saudi production capacity further tightens global supply, compounding price pressures already generated by the Iran situation.
Broader Middle East Dependence
The Middle East collectively accounts for a disproportionately large share of global oil production. Instability across the region, therefore, has an outsized impact on international markets. For Ghana, which remains heavily dependent on imported refined petroleum products, these dynamics translate directly into higher fuel costs, inflationary pressure, and threats to energy affordability for households and businesses alike.
Price Projections
Current market analysis suggests that if the conflict continues without resolution, the price of crude oil could rise to approximately USD 120 per barrel—a level that would substantially strain Ghana's import bill and fiscal position.
Ghana's Structural Vulnerabilities
The current crisis has exposed a number of longstanding weaknesses in Ghana's energy sector that require urgent attention:
• Overreliance on imported refined fuels makes Ghana susceptible to external supply shocks.
• Absence of a comprehensive national emergency energy response framework to manage supply disruptions.
• Insufficient strategic petroleum reserves would sustain the economy through a prolonged supply interruption.
• Heavy dependence on fossil fuels across the energy mix, with limited diversification into renewables and alternative sources.
• Contractual arrangements with oil-producing companies that do not adequately protect Ghana's interests during force majeure events or market volatility.
Industries dependent on heavy fuel oil and natural gas, including manufacturing, face the prospect of production stoppages, job losses, and reduced economic output should the supply situation deteriorate further. As ASEC has observed, targeting a country's energy infrastructure is one of the most effective ways to undermine its stability and sovereignty. This reality makes energy security inseparable from national security.
ASEC’s Recommendations to the Government of Ghana
ASEC recommends a structured response to the current crisis, organised across three time horizons:
Short-Term Recommendations (Immediate Actions)
Deploy the GH¢1 Fuel Levy as a Consumer Buffer. The government should channel revenue from the existing one-cedi fuel levy to provide targeted relief to Ghanaian consumers who are most exposed to fuel price increases. This mechanism can help stabilise demand and protect vulnerable households without requiring new fiscal instruments.
Initiate Emergency Diplomatic Engagements with African Oil Producers. Ghana should immediately open diplomatic channels with neighbouring and regional oil-producing nations, particularly Nigeria, the Republic of Congo, and Algeria, to explore preferential supply agreements. Diversifying Ghana's sourcing away from Middle Eastern suppliers would reduce exposure to the current geopolitical disruption and build more resilient supply chains within the continent.
Medium-Term Recommendations
Build and Expand Strategic Petroleum Reserves. Ghana must urgently invest in expanding both its petroleum storage capacity and the volume of reserves held. Many developed nations maintain reserves sufficient to sustain economic activity for months or years. Ghana's current reserves would prove inadequate in the event of a prolonged supply disruption. Medium-term investment in storage infrastructure is therefore a critical priority.
Renegotiate Royalty and Revenue Agreements with Oil Companies. The Government of Ghana should re-examine the terms of its existing agreements with international oil-producing companies, with particular attention to royalty structures and revenue-sharing arrangements. The goal should be to secure terms that give Ghana greater flexibility and more equitable returns from its own hydrocarbon resources.
Incorporate Force Majeure Clauses into Energy Contracts. Government contracts with oil supply companies should include appropriately drafted force majeure provisions. Such clauses protect both parties from liability in circumstances involving extraordinary, unforeseeable events, such as the current war, and provide a legal framework for managing supply obligations during crises.
Long-Term Recommendations
Rehabilitate and Expand the Tema Oil Refinery. Ghana's current dependence on imported refined fuels is a fundamental vulnerability. Investing in the restoration and modernisation of domestic refining capacity—particularly at the Tema Oil Refinery—would reduce import exposure and allow Ghana to process its own crude oil into usable products.
Diversify the National Energy Mix Through Renewables. The government should accelerate investment in solar, wind, and other renewable energy technologies to reduce the overall economy's dependence on fossil fuels. A more diversified energy mix would make Ghana less vulnerable to oil price shocks, regardless of their origin.
Adopt a Hybrid Energy Transition Strategy. ASEC advocates for a balanced approach to energy transition: one that does not abruptly abandon oil and gas—which remain essential to Ghana's current energy system—but instead pursues a deliberate, phased shift toward cleaner technologies. This includes expanding electric vehicle infrastructure and incentivising the adoption of electric mobility to progressively reduce demand for imported petroleum.
ASEC cautions against a premature or disorderly exit from hydrocarbons. A hybrid approach that combines continued prudent use of oil and gas with accelerated growth in renewables represents the most pragmatic and resilient path forward for Ghana.
Conclusion
The conflict in the Middle East is not simply a distant geopolitical event. It is a direct challenge to Ghana's energy security, economic stability, and long-term development trajectory. The disruption of key supply routes, the threat to major producing nations, and the prospect of oil prices reaching USD 120 per barrel all demand a decisive and coordinated policy response.
The Africa Sustainable Energy Centre calls on the Government of Ghana to treat this crisis as the national security matter it fundamentally is. The recommendations set out in this brief, spanning immediate consumer protection, diplomatic engagement, institutional reform, and long-term energy diversification, provide a coherent roadmap for building a more secure, resilient, and self-reliant energy future for Ghana.
ASEC stands ready to provide technical guidance and policy support as the government navigates these challenges.
