Iran War Requests Shockwaves Throughout African Fuel Market and Economies
- Wanjiru Waweru
- 49 minutes ago
- 3 min read
Wanjiru Waweru, Jadetimes Contributor
W. Waweru is a Jadetimes News Reporter Covering Africa News
Nairobi, Kenya — Escalating the war with Iran is driving up oil prices, which are rising across African economies, causing higher fuel costs, inflation, and renewed pressure on currencies across the continent.
Africa thrust most of the petroleum products it swallowed, leaving many economies highly vulnerable to supply disruptions tied to tightness in the Middle East, a region central to international oil supplies.
Nick Hedley, an energy transition research analyst at Zero Carbon Analytics, explained the impact of the shockwaves on the oil products that affect Africa.
“Africa is a net importer of oil products, meaning it is heavily exposed to shocks like these,” said Hedley. “When global oil supplies tighten, prices rise while African currencies often weaken as investors move funds into safe-haven assets such as the U.S. dollar.”
That combination magnifies the influence of price spikes in import-dependent markets, including Ghana and Kenya.
“A similar dynamic unfolded after Russia’s full-scale invasion of Ukraine in 2022, when rising crude prices and a weakening currency pushed transport fuel prices in South Africa up by more than 25% within six months,” said Hedley.
Oxford Economics Senior Economist, Brendon Verster, responds.
“The near-term risks come from mainly the rising oil prices and weakening exchange rates as investors move to safe-haven assets,” said Verster.
The Oil Markets endured the conflict particularly delicately because of the strategic importance of the Strait of Hormuz, a narrow shipping corridor through which the world’s fifth-largest crude passes.
The influence of higher oil prices around Africa would be unequal.
Countries, including Kenya and Uganda, said their supplies remain stable even as they work to ensure continuity. Nigeria and Ghana assemble crude oil; however, they import most of their refined petroleum products, limiting exports amid rising global prices.
“It’s difficult to say at this point whether they will see net gains,” said Hedley. “Oil producers could benefit from higher crude prices, but ordinary citizens will likely face higher transport and fuel costs, and potentially higher interest rates.”
Still, sustained high prices could provide a windfall for Africa’s major oil exporters. Verster noted that Nigeria exports approximately 1.5 million barrels of oil per day and has concentrated on its medium-term fiscal framework on oil prices between $64 and $66 per barrel through 2028.
The war pushed prices above $100 per barrel, a level that, if sustained, would significantly increase revenues for exporters such as Angola, Algeria, and Libya.
For most African residents, therefore, the immediate effect is most likely to be a skyrocketing cost of living.
“This is a serious concern,” said Hedley. “Rising fuel costs therefore feed quickly into broader inflation and reduce household purchasing power.”
Peter Attard Montaldo, managing director at the Advisory Firm Kruthan in South Africa, explained that the crisis is also affecting African economies. He noted that the latest economic reforms have benefited from stabilizing the country’s currency and bond market.
“So far the impact has really been muted, for countries like South Africa,” said Montaldo.
Countries officially operated under the programs from the International Monetary Fund could handle extension strain as energy import bills drain scarce foreign exchange reserves. Among the most vulnerable, analysts addressed are Sudan, The Gambia, the Central African Republic, Lesotho, and Zimbabwe.
Above the long term, analysts reported the crisis might reinforce calls for African nations to diversify their energy systems and limit dependence on imported fuels.
Kennedy Mbeva, a research associate at the Center for the Study of Existential Risk at the University of Cambridge in England, United Kingdom, stated that in order to achieve that, it would need to request the short-term balance of fiscal pressure with long-term investments in clean energy and green industrialization.
“It makes strategic sense for African countries to ensure long-term energy security and sovereignty,” said Mbeva.
Wanjiru Waweru is a Jadetimes Contributor. You can email Wanjiru at sellmypaperwork@gmail.com.
She is the Owner of “Sell My Paperwork." Visit the website and follow it on social media.
Sell My Paperwork
Website: Sell My Paperwork - Webpage
Facebook: Sell My Paperwork - Facebook Page
Instagram: @sellmypaperwork
Comments