Hormuz crisis hits Africa

by AZADEH AKBAR
Special contributor
TEHRAN, (CAJ News) – RENEWED fighting between the United States and Iran is creating fresh economic risks for African countries as oil prices climb and uncertainty grows around shipping through the Strait of Hormuz.

Brent crude rose to about $97 a barrel on Tuesday as markets reacted to escalating military tensions and concerns that disruptions around the strategic waterway could constrain global energy supplies.

The Strait of Hormuz is a major route for international oil shipments, meaning prolonged disruption could quickly affect fuel, transport and production costs far beyond the Middle East. Reuters+1

For Africa, the impact is likely to be uneven. Oil-producing countries could benefit from higher export prices, while major fuel-importing economies face greater pressure on inflation, currencies and government budgets.

Analysts have previously warned that the conflict could create significant energy shocks across the continent, particularly for countries heavily dependent on imported fuel. Atlas Institute+1

Higher fuel prices also threaten agriculture. Farmers rely on diesel for tractors, irrigation pumps, transport and processing, while fertiliser and other agricultural inputs can become more expensive when energy and shipping costs rise.

Higher logistics costs could eventually feed into food prices, placing additional pressure on households already facing high living costs.

Infrastructure projects could also face increased expenses. Construction companies depend heavily on fuel for heavy machinery, trucks and generators.

A prolonged energy-price shock could therefore increase the cost of roads, bridges, ports, housing and industrial projects, potentially forcing governments to reconsider project timelines or budgets.

African businesses that depend on international shipping could face another layer of pressure if maritime risks increase.

Higher insurance premiums, longer shipping routes and increased freight charges can raise the cost of imported machinery, technology equipment, industrial materials and consumer goods.

The crisis is particularly important for countries linked to Red Sea and Gulf trade routes.

Analysts have warned that instability surrounding the Iran conflict could affect security and commercial activity around the Horn of Africa and wider Red Sea region. Critical Threats

African governments may therefore face renewed pressure to protect fuel supplies, strengthen strategic reserves and accelerate investment in alternative energy.

Longer term, the crisis could reinforce arguments for reducing dependence on imported fossil fuels and expanding renewable power.

With oil markets already reacting sharply to renewed military escalation, Africa’s economic exposure to events thousands of kilometres away is becoming increasingly difficult to ignore.

– CAJ News