NAIROBI – Surging oil prices triggered by the war with Iran are rippling across African economies, threatening higher fuel costs, rising inflation and renewed pressure on currencies across the continent.
Africa imports most of the petroleum products it consumes, leaving many economies highly vulnerable to supply disruptions tied to tensions in the Middle East, a region central to global oil flows.
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“Africa is a net importer of oil products, meaning it is heavily exposed to shocks like these,” said Nick Hedley, an energy transition research analyst at Zero Carbon Analytics.
When global oil supplies tighten, Nedley said, prices rise while African currencies often weaken as investors move funds into safe-haven assets such as the U.S. dollar.
That combination amplifies the impact of price spikes in import-dependent markets such as Kenya and Ghana.
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, Hedley said.
“The near-term risks come from mainly the rising oil prices and weakening exchange rates as investors move to safe-haven assets,” said Oxford Economics senior economist Brendon Verster.
Oil markets remain particularly sensitive to the conflict because of the strategic importance of the Strait of Hormuz, a narrow shipping corridor through which about a fifth of the world’s crude passes.
The impact of higher oil prices across Africa will be uneven.
Countries like Kenya and Uganda say their supply remain stable even as they work on ensuring continuity. Nigeria and Ghana produce crude oil but import most of their refined petroleum products, limiting the benefits to them of higher global prices.
“It’s difficult to say at this point whether they will see net gains,” Hedley said. “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 bring a windfall for Africa’s major oil exporters. Verster noted that Nigeria exports roughly 1.5 million barrels of oil per day and has based its medium-term fiscal framework on oil prices between $64 and $66 per barrel through 2028.
The war pushed prices above $100 per barrel Monday, a level that if sustained, would significantly boost revenues for exporters including Angola, Algeria and Libya.
For most African households, however, the immediate effect is likely to be higher living costs.
“This is a serious concern,” Hedley said, noting that most food and goods across Africa are transported by road. “Rising fuel costs therefore feed quickly into broader inflation and reduce household purchasing power.”
Peter Attard Montalto, managing director at South African advisory firm Kruthan said the crisis is also testing African economies.
“So far the impact has really been muted, for countries like South Africa,” he said, noting that recent economic reforms have helped stabilize the country’s currency and bond markets.
“Still, higher oil and gas prices are expected to filter into inflation in the coming months,” Montalto said.
Countries already operating under programs from the International Monetary Fund could face additional strain as energy import bills drain scarce foreign exchange reserves. Among the most vulnerable, analysts warn are Sudan, The Gambia, Central African Republic, Lesotho and Zimbabwe.
Over the longer term, analysts say the crisis may reinforce calls for African nations to diversify their energy systems and reduce dependence on imported fuels.
“It makes strategic sense for African countries to ensure long-term energy security and sovereignty,” said Kennedy Mbeva, a research associate at the Centre for the Study of Existential Risk at the University of Cambridge.
Achieving that, Mbeva said, will require balancing short-term fiscal pressures with long-term investments in clean energy and green industrialization.
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