Integrated_Annual_Report_2026 - Flipbook - Page 38
INTRODUCTION
SASOL AT A
GLANCE
EXECUTING
STRATEGY
DRIVING SUSTAINABLE
VALUE CREATION
DELIVERING
BUSINESS VALUE
SUMMARISED FINANCIAL
PERFORMANCE
CORPORATE
GOVERNANCE
SUSTAINABILITY
REPORT
REMUNERATION
REPORT
ASSURANCE/
ADMINISTRATION
OPERATING CONTEXT
External and internal influences impact Sasol’s ability to do business sustainably
The energy security and environmental influences have been pivotal in defining the energy and chemical sectors. The global push towards decarbonisation and the economic pressures have driven the
adoption of renewable energy technologies, providing Sasol with an opportunity by leveraging its own demand to create momentum and establish a platform for value-accretive and sustainable growth,
while maintaining pace with customer needs.
FINANCIAL MARKET
World
South Africa
Source: IMF, StatsSA, SARB, *Sasol forecast
16,9
15,2
15,4
15,7
16
14,2
18
18,2
17,8
20
18,7
Average exchange rate (US$/R)
14
12
19
20
21
22
23
24
25
Refined product markets are likely to remain tight given
low inventory levels globally, sanctions-related trade
disruptions and elevated supply chain costs, which
should support near-term margins. Chemical markets
are expected to recover only gradually, with persistent
oversupply likely to keep margins under pressure
until capacity rationalisation and stronger end-market
demand restore a more balanced market.
100
90
80
70
60
50
40
19
26
20
21
22
23
Year
Year
Source: S&P Global
Source: Reuters
SASOL INTEGRATED REPORT 2026
37
74,6
26
25
84,7
24
87,3
23
Year
92,1
22
54,2
3,0
1,2
3,5
1,1
3,5
0,5
3,3
0,8
3,8
21
51,2
20
Energy downstream markets diverged, with refined products outperforming chemicals. Refined
product markets remained structurally tight, due to constrained global refining capacity, sanctions
related disruptions to Russian product exports, and logistics and supply dislocations. Middle
distillates, particularly diesel, benefitted from limited supply, higher logistics costs, and the Middle
East conflict. In contrast, chemical markets stayed in a prolonged downcycle, as persistent global
oversupply, driven largely by capacity additions in China and the Middle East, continued to outpace
weak and uneven demand growth. This kept prices and margins under
pressure, which has triggered some rationalisation
announcements.
Average Brent crude oil (R/bbl)
68,6
-8
Crude oil markets are expected to remain highly sensitive to geopolitical developments, OPEC+
production decisions and the pace of global demand growth. While the return of previously curtailed
supply could cap prices in the absence of further disruptions, continued uncertainty around the
Middle East conflict and the risk of interruptions to key trade routes are expected to keep volatility
elevated and provide support to prices.
US$/bbl
-4
-2,7
-2
-6,2
% year-over-year
2
0
-6
R/US$
The path to a lasting
resolution to the Middle East
conflict remains uncertain,
while geopolitical and trade
policy development will likely
continue to impact energy
and commodity markets.
This, along with evidence of
supply chain bottlenecks, input
cost pressures, cost of living
increases and tighter monetary
policy in some countries,
poses significant downside
growth risk in the coming
year. Against this uncertain
backdrop, we continue to
utilise scenario analysis,
resilience testing and hedging
strategies to help mitigate
the effects of external factors
beyond Sasol’s control.
2,1
During the financial year, global oil prices weakened to a low point below US$65/bbl in December,
driven by expectations of oversupply amid the return of volumes previously curtailed by OPEC
and softer demand indicators. This downward trend was subsequently reversed by the outbreak
of conflict between the US and Israel on the one hand, and Iran on the other, which introduced a
significant geopolitical risk premium and resulted in pronounced price volatility. As a consequence,
market dynamics shifted from oversupply concerns to conflict-driven supply disruptions, with prices
increasingly influenced by the continued constraint of production from the Middle East and transit
through the Strait of Hormuz. Prices subsequently reached a high of US$144/bbl during April,
averaging US$80/bbl over FY26.
6,7
Crude and product markets
In 2026, global economic activity was resilient in the face of several
challenges, including tariff and trade frictions, elevated policy uncertainty and
the Middle East conflict. Although South Africa’s economic performance
was uneven, there was an improvement in investor confidence and more
favourable credit ratings underpinned by fiscal consolidation and ongoing
structural reforms. The US economy remained on a firm footing, supported by
household spending and business investment. In contrast, Euro area growth
was subdued, as low levels of
business and consumer
World and South African GDP growth (%)
confidence, strained industrial
8
activity and muted external
6
demand weighed on
4
the region’s performance.
4,9
Macroeconomic environment
79,5
DRIVER
24
25
26
