Iran War Boosts Oil Prices Across Africa

Kenya Seeks Financial Assistance Amidst Global Energy Crisis

African nations are facing economic uncertainty due to the ongoing US-Israeli conflict with Iran, which has led to a surge in energy prices across the continent. Kenya is among several countries seeking financial help from international organizations.

Eric Wainaina, a motorcycle taxi driver in Nairobi, Kenya, has seen his income decline by half due to rising fuel costs. He now covers only 90km per day, compared to 180km before the conflict, resulting in reduced earnings. The price of diesel has increased by 24% during the war, affecting Kenyans’ daily lives.

The International Energy Agency (IEA) describes the current oil supply shock as the most severe in history. Goldman Sachs estimates that global oil production has declined by 14.5 million barrels per day due to disruptions in trade and attacks on regional energy infrastructure.

Many African nations rely heavily on imported refined fuel, leaving them vulnerable to market fluctuations. The Africa Finance Corporation (AFC) warns of a potential 86-million-tonne fuel shortfall by 2040, highlighting the gap between domestic production capacity and growing energy demands.

Kenya is considering a loan of up to $600m from the World Bank to mitigate the economic impact of the global energy crisis. Fuel prices have surged in Kenya, with diesel prices increasing by 24% during the war.

The Iran conflict has triggered a global energy crisis, affecting countries worldwide. Amaka Anku, head of Eurasia Group’s Africa practice, notes that “when you have a global shock like this, it affects everyone.” Rising inflation is hurting economies globally, and Africa is not an exception.

Kenya’s economic situation is expected to worsen if the situation does not improve soon. The country may be forced to rely on land inherited from its grandfather in rural areas, leading to a lower standard of living.

Source: Al Jazeera