Surging Oil Prices from Iran Conflict Strain African Economies

Rising global oil prices caused by the conflict involving Iran are putting pressure on African economies, leading to higher fuel costs, inflation, and weaker currencies. Most African countries rely on imported petroleum, making them vulnerable to supply disruptions, while major oil exporters like Nigeria, Angola, Algeria, and Libya could benefit from higher revenues. The crisis highlights the need for African nations to diversify energy sources and invest in long-term energy security.

Surging global oil prices driven by the ongoing conflict involving Iran are creating ripple effects across African economies, analysts and experts warn. The sharp rise in oil costs threatens to push up fuel prices, increase inflation, and place renewed pressure on local currencies throughout the continent.
Africa remains heavily reliant on imported petroleum products, making its economies particularly vulnerable to disruptions in supply stemming from tensions in the Middle East, a region critical to global oil flows. “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, Hedley explains, prices inevitably rise. At the same time, African currencies often weaken as investors shift their funds toward perceived safe-haven assets, such as the U.S. dollar, compounding the economic impact. This combination of rising costs and weaker currencies particularly affects import-dependent countries like Kenya and Ghana.
A similar pattern occurred following Russia’s full-scale invasion of Ukraine in 2022, when rising crude oil prices and a weakening South African rand pushed transport fuel costs up by more than 25 percent in just six months, Hedley noted. Brendon Verster, senior economist at Oxford Economics, highlighted that the immediate risks stem largely from rising oil prices and currency depreciation, which often move in tandem as investors seek stability in global financial markets.
The strategic importance of the Strait of Hormuz, a narrow corridor through which roughly 20 percent of the world’s crude oil passes, adds to the sensitivity of oil markets. Any disruption in this key shipping route can amplify global oil price fluctuations, with direct consequences for Africa’s energy costs.
The effects of rising oil prices, however, are expected to vary across the continent. Countries such as Kenya and Uganda report that their fuel supplies remain stable, even as they continue to take measures to maintain continuity. Meanwhile, oil-producing nations like Nigeria and Ghana still import the majority of their refined petroleum products, limiting the direct benefit of higher global crude prices for domestic consumers. “It’s difficult to say at this point whether they will see net gains,” Hedley said. “While oil producers may benefit from higher crude prices, ordinary citizens will likely face increased transport and fuel costs, which could also push up interest rates.”
For major African oil exporters, sustained high oil prices could generate a significant financial windfall. Nigeria, for instance, exports approximately 1.5 million barrels of crude oil per day and has structured its medium-term fiscal framework assuming oil prices between $64 and $66 per barrel through 2028. Prices surged above $100 per barrel on Monday due to the conflict, a level that, if sustained, would considerably increase revenues for other major exporters, including Angola, Algeria, and Libya.
Despite potential gains for exporters, the immediate consequence for most African households is likely to be a rise in living costs. Hedley explained that the majority of food and goods across Africa are transported by road, meaning increases in fuel costs directly feed into broader inflation and reduce household purchasing power.
The current crisis also tests the resilience of African economies. Peter Attard Montalto, managing director at South African advisory firm Kruthan, said that while the overall impact has been muted in countries like South Africa, higher oil and gas prices are expected to filter through to inflation over the coming months. Countries already operating under International Monetary Fund programs could face additional strain as energy import bills consume limited foreign exchange reserves. Among the most vulnerable nations, analysts point to Sudan, The Gambia, the Central African Republic, Lesotho, and Zimbabwe.
In the long term, experts argue that the current crisis underscores the need 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. Mbeva added that achieving this will require balancing immediate fiscal pressures with sustained investments in clean energy infrastructure and green industrialization strategies