Kenya and the wider East African region are staring at a potential fuel and economic crisis as escalating conflict in the Middle East disrupts global oil flows through the critical Strait of Hormuz.
While the government has moved to calm fears, warning signs are clear that the situation could quickly spiral into higher fuel prices, supply constraints and broader economic strain.
Treasury Cabinet Secretary John Mbadi on Thursday told Parliament that Kenya currently has sufficient fuel reserves, even as geopolitical tensions threaten global energy markets.
As of March 30, he said the country holds 16 days of petrol, 19 days of diesel and 49 days of jet fuel, with additional shipments expected this month starting April 2.
Mbadi said an inter-ministerial team had been formed to monitor the crisis and develop response measures.
But even as Mbadi expressed confidence with the situation, he acknowledged that the implications for Africa remain acute because the Middle East plays a central role in global energy supply.
“The Middle East serves as the continent’s largest external supplier of petroleum products and natural gas, making African economies highly vulnerable to supply disruptions and price shocks arising from instability in the region”, CS Mbadi said.
And while he noted that the G-to-G arrangement would largely cushion the Kenyan market from a significant influx of oil prices, Mbadi said imports for May and June were likely to reflect higher global prices.
Global oil prices have surged by over 50 per cent in March, with Brent crude surpassing $110 per barrel.
The Strait of Hormuz is one of the world’s most critical oil transit routes, with about 20–30 per cent of global oil passing through it. Key exporters include Saudi Arabia, UAE, Kuwait and Iraq, which have been affected by retaliatory attacks by Iran.
Even if supply continues via alternative routes shipping becomes longer and more expensive.
This is expected to pose a significant risk of further increases in domestic pump prices with attendant inflationary and fiscal pressures.
“The G-G arrangement between Kenya and the three largest suppliers of oil in the Middle East is expected to somehow cushion us from the energy shocks being experienced across the world today with the disruption caused by the closure of the Strait of Hormuz because the arrangement binds the companies to supply Kenya with oil from whatever sources”, he said.
Kenya imports all petroleum products requirements under the G-G framework in bid to cushion the country from volatile spot markets and to allow suppliers flexibility to source oil from alternative routes..
The suppliers are Aramco Trading Fujairaj FZE, ADNOC Global Trading Ltd and Emirates National Oil Company Limited (ENOC) domiciled in Dubai, Abu Dhabi and Singapore respectively.
A shipping expert based in Dubai, who is not allowed to speak to media, told DiploBrief that despite the reassurances, the reality is that shipping disruptions will affect all.
“The problem is not just supply contracts—it’s global pricing. Once the Strait of Hormuz is affected, oil prices rise worldwide, as has already been reported, and import-dependent countries like Kenya cannot escape that,” he said
The risks are already visible across the region.
In Tanzania, the government on Wednesday reversed recent assurances that its stocks would last until mid-May and sanctioned a more than 30 per cent increase in official fuel prices.
The country’s Energy and Water Utilities Regulatory Authority announced that the new cap prices for petroleum products would take effect immediately.
Ewura Director General James Mwainyekule said the new prices were largely influenced by the Middle East conflict.
The disruption has driven up shipping costs, including higher insurance premiums for vessels and rising Free on Board prices in the Gulf market.
In Uganda, a joint statement by the Ministry of Energy and the Uganda National Oil Company said oil shipments had been affected by disruptions in the Strait. While Kampala reported relatively stable reserves to last just over three weeks, state officials acknowledged the vulnerability of supply chains.
Through the Tuesday statement, the officials said Uganda holds about 22 days of petrol, 23 days of diesel and 30 days of jet fuel, figures that mirror Kenya’s short-term buffer but underline the region’s limited cushion against prolonged shocks.
Beyond East Africa, a joint assessment by the African Development Bank, African Union Commission, United Nations Development Programme and the United Nations Economic Commission for Africa paints an even more worrying picture.
The institutions warn that the conflict is already triggering sharp increases in energy, food and fertiliser prices, with global oil prices surging by more than 50 per cent as of late March.
“Africa has been hit by too many external shocks not of its making,” said UNECA Executive Secretary Claver Gatete, calling for urgent measures to cushion economies.
The report notes that 29 African currencies have weakened, raising the cost of importing fuel and servicing external debt—further tightening fiscal space for governments already under pressure.
Fuel costs are a key driver of the economy, affecting transport, food prices and industrial production. A sustained spike could thus ripple through households, deepening the cost-of-living crisis.
