The escalating tensions between Iran and the United States are sending economic shockwaves across Africa, with the continent’s fuel import routes, shipping insurance costs, and food supply chains all facing fresh disruptions. Even without a full closure of the Strait of Hormuz—the world’s most critical oil chokepoint—African economies are already absorbing higher fuel prices, pricier imports, and mounting freight costs.
The crisis has refocused attention on Bab el-Mandeb, the narrow strait between the Horn of Africa and the Arabian Peninsula, which analysts warn could emerge as Africa’s most vulnerable flashpoint. Yemen’s Houthi rebels, allied to Iran, have repeatedly targeted ships passing through the Red Sea corridor, disrupting the container shipping lanes that European and Asian firms rely on to move goods to and from East African ports.
“Even before Hormuz became a full crisis, Bab el-Mandeb was already a problem,” said Amina Diallo, a maritime security analyst based in Nairobi. “African traders importing manufactured goods from Asia have seen freight rates double in six months. Now add Hormuz disruption, and the compounding effect on already stretched current account deficits is very serious.”
East African nations are among the most exposed. Kenya, Tanzania, Rwanda, Uganda, and Burundi import almost all their refined petroleum products via routes that either pass through the Red Sea or feed into global benchmarks set in the Gulf. When oil prices rise due to supply fears, the landed cost of fuel in Mombasa and Dar es Salaam rises disproportionately because of transport, insurance, and exchange rate pressures.
South Africa faces a different but equally painful exposure. The country’s refineries, many of them operating well below capacity after years of underinvestment, depend on crude oil imports priced against international benchmarks. Every dollar increase in the oil price worsens South Africa’s trade balance and puts pressure on the rand.
West African economies are not immune. Nigeria, Africa’s largest crude oil producer, ironically imports refined gasoline to meet domestic demand because its refineries have been non-functional for years. That import requirement means Nigeria’s fuel pricing is directly tied to international markets, and any sustained rise in oil prices translates immediately into higher pump prices and increased subsidy burdens for the cash-strapped government.
The insurance dimension is particularly underestimated in its impact. Lloyd’s of London and other marine insurers have been raising war risk premiums for ships operating near the Gulf and the Red Sea, costs that ultimately flow into the landed price of every imported good on the continent.
“The ripple effects are not visible in the headlines yet, but they are already in the shops,” said Charles O’Brien, an economist with the African Development Bank’s regional integration desk. “Fuel costs affect transport, which affects food prices, which affects inflation, which affects household purchasing power. The chain is long but direct.”
Commodity markets are also feeling pressure. The Sahel and Horn of Africa regions, already dealing with below-average harvests in several countries, depend on global grain markets priced on international exchanges influenced by energy input costs. Higher oil prices mean higher fertilizer costs, which means more expensive next-season harvests.
For Africa’s shipping sector, the crisis is accelerating a rethink about supply chain resilience. Several East African traders and manufacturers have begun exploring longer but safer routes around the Cape of Good Hope, an option that adds two weeks to transit times but avoids the disputed waters.
The African Union has called for de-escalation, with Commissioner for Peace and Security Bankole Adeoye urging all parties to respect international maritime law. “Africa cannot afford another shock when our economies are still recovering from the pandemic and the debt overhang,” he said in a statement. “The continent must speak with one voice for free and safe navigation.”
As global powers maneuver for diplomatic solutions, African governments are largely bystanders in a crisis they did not create but will certainly feel.