Oil
Hormuz shipping attacks threaten African fuel and inflation
Attacks on vessels near the Strait of Hormuz are driving up freight, insurance and fuel costs across Africa, intensifying liquidity and inflation risks.
Key points
- Shipping disruptions in the Strait of Hormuz threaten oil-importing African nations with higher freight and insurance expenses.
- Kenya has increased maximum retail prices for petrol and diesel while extending a reduced VAT rate to cushion consumers.
- Experts warn the crisis creates a liquidity transmission challenge rather than just a basic oil-price shock.
Recent vessel attacks near the Strait of Hormuz have pushed up global crude values and sparked concerns over energy supply stability, according to Forbes Africa. The vital maritime corridor, which handled roughly one-fifth of worldwide petroleum liquids consumption in 2024 per U.S. Energy Information Administration figures, is central to these global supply worries.
Following the incidents, Brent crude futures reached $106.08 per barrel, while U.S. West Texas Intermediate climbed to $98.05. For African countries relying heavily on foreign petroleum, the repercussions extend to elevated freight charges, higher insurance premiums and increased demand for foreign exchange.
Impact on African markets
According to Forbes Africa, Kenya responded to mounting import expenses by raising retail caps for petrol and diesel. Nairobi lifted petrol rates by approximately 6% and diesel by 4.5%, while the state prolonged a cut in fuel value-added tax to 8% until the middle of January.
Olusegun Adebayo, a Nigerian liquidity management professional, told Forbes Africa that the situation constitutes a liquidity transmission hurdle. He noted that net importers face foreign-exchange shortages and working-capital constraints as businesses commit extra cash to fund identical volumes of fuel and raw materials.
Outlook for Nigeria and others
Tope Adedara of MSM Group explained that shipping and insurance costs adjust almost immediately, whereas retail pump adjustments follow over days or weeks. Nations possessing weak currencies, restricted fiscal space and narrow foreign reserves remain most vulnerable to these cost transmissions.
While nations like Kenya and Ghana face direct import exposure, Nigeria presents a mixed picture. Higher international crude values could increase state revenues, yet constrained domestic output and reliance on imported refined products leave local households and enterprises exposed to rising expenses.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Crude benchmarks move budgets, currencies and inflation in producer and importer countries alike. For economies such as Nigeria, where fuels dominate exports, production and refining decisions move the whole economy.
9.5% of world merchandise exports were fuels in 2025Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
