Hormuz shock splits Africa as Kenya loses Middle East sales, Angola’s $4bn fuel subsidy bill erodes oil windfall

The disruption to shipping through the Strait of Hormuz since the US-Israeli war against Iran broke out in late February is hitting African economies unevenly. Exporters of food and flowers to the Middle East have lost sales, while crude producers are collecting higher oil prices that are partly swallowed by the rising cost of the refined fuel they import.

The Centre for Research on Energy and Clean Air (CREA) estimated in an August 26 report that 32 of the 41 African countries in its data paid $21.9bn more for seaborne fossil fuel imports between March and August than pre-war futures prices had implied, while nine net exporters earned an extra $21.6bn, leaving the continent with a net cost of about $300mn.

Nigeria earned an extra $7.5bn and, together with Angola, Libya and Algeria, accounted for $18.1bn of the exporters’ gains. Egypt paid the most, at $5.2bn, followed by South Africa at $3.5bn and Morocco at $2.2bn.

The risks to shipping have not receded. Iran’s Revolutionary Guards said on November 12 that two supertankers carrying more than 4mn barrels of oil had been stopped after explosions in the strait, IntelliNews reported. About 20% of global oil and liquefied natural gas (LNG) supplies passed through the waterway before the war, and daily traffic of 125–140 vessels at times fell to fewer than 10. Thirty-seven ships were attacked in October, the highest monthly total since the war began, according to the Washington Institute for Near East Policy, the Gulf Daily News reported.

The McKinsey Global Institute described the closure, in a September 17 report, as the largest energy supply disruption in modern history, removing 14% of global oil and gas supply at its peak, more than double the share lost in the 1970s shocks, IntelliNews reported on October 4.

The International Monetary Fund forecast in its October World Economic Outlook that global growth would slow to 3.1% in 2026 from 3.5% in 2025, below the 3.3% it had projected in January, before the war, though up from 3.0% in July. Brent rose to about $118 a barrel in late October but fell to about $93 on November 9, its lowest since late August.

Middle East customers lost

Kenya shows the cost for exporters that rely on Middle Eastern markets. Its exports to the Middle East fell 26.4% year on year to KES31.09bn ($241mn) in the second quarter from KES42.23bn, a drop of KES11.14bn ($86mn), according to Kenya National Bureau of Statistics (KNBS) data.

Disruption to shipping and air cargo hit sales of meat, tea and flowers, with vessels rerouted around the Cape of Good Hope and carriers adding freight and insurance surcharges. Longer routes, higher cargo insurance, war-risk surcharges and delays raise working-capital needs that are ultimately passed on to African importers and exporters, David Beer, chief executive of TradeMark Africa, wrote in an analysis published by the International Institute for Sustainable Development (IISD).

Exports to the United Arab Emirates, Kenya’s main Gulf market, had already fallen in 2025 before the war, while shipments there more than doubled in July to KES8.82bn from KES4.06bn in June, according to KNBS data.

The Middle East takes about a quarter of Kenya’s tea, or about 100mn kg a year. The East Africa Tea Trade Association said 8mn kg of tea was held in Mombasa in April, and its managing director, George Omuga, told the Nation earlier this year that the industry had been losing about $8mn a week since March 1.

Floice Mukabana, chief executive of the Kenya Export Promotion and Branding Agency (Keproba), urged exporters in April to seek new markets across Africa under the African Continental Free Trade Area.

Exporters’ gains eroded

Higher crude prices should benefit Angola, where hydrocarbons account for 92% of goods exports and more than 40% of fiscal revenue, according to S&P Global Ratings, which in August affirmed the country at B- with a stable outlook. S&P forecast in August that oil would average about $98 a barrel in 2026, and the government now expects about $90, against the $61 assumed in the budget.

However, S&P said production of about 1.1mn barrels per day limits the gain to state revenue. In April, Minister of State for Economic Coordination José de Lima Massano estimated that an average oil price of about $80 would raise revenue by about AOA3.2 trillion, Ver Angola reported, though prices have since run higher.

The same prices have pushed up the cost of imported fuel. Angola’s fuel subsidy bill is set to reach AOA3.7–3.8 trillion ($4.1–4.2bn), more than double the AOA1.7 trillion budgeted, IntelliNews reported. Fuel import costs rose 77% year on year to $3.197bn in January–September, despite a 3% fall in volumes, according to Expansão.

Imports accounted for 74% of the fuel acquired for domestic distribution in the third quarter, according to the Petroleum Derivatives Regulatory Institute, and petrol sold for $0.327 a litre in October, the second-cheapest price in Africa after Libya, according to GlobalPetrolPrices data cited by the government.

Finance Minister Vera Daves de Sousa told Lusa that fuel subsidy spending could rise to 2.48% of GDP in 2026, describing it as “a cost associated with subsidies, specifically for fuel, which we haven’t fully removed yet”. Ottoniel dos Santos, secretary of state for finance and the Treasury, told Reuters on October 16 that the 2027 oil price assumption would not differ significantly from the IMF’s forecast of $71.50 a barrel.

The 2027 budget submitted to the National Assembly assumes an average of $71, Ver Angola reported. National Assembly President Adão de Almeida had said lawmakers would begin the first-reading debate on November 12. Angola’s external debt-service costs will rise to $9.1bn in 2027 from $6.5bn in 2026, according to S&P.

Libya, where oil accounts for roughly 90% of state income, faces the same squeeze. The Audit Bureau projected October oil export earnings of $3.215bn and put outstanding fuel import obligations at an estimated $1.55bn. Of $1.448bn deposited in the National Oil Corporation’s accounts between October 1 and 15, about $864.57mn, or nearly 60%, was transferred to a fuel account.

“Even net oil exporters, some of them are finding themselves in the same situation as net oil importers,” Sindiso Ndlovu, senior political risk analyst at the African Trade and Investment Development Insurance (ATIDI), told GTR in May, noting that many producers had pre-sold output under resource-backed loans, limiting how much of the higher prices reached their budgets.

Robert Besseling, chief executive of Pangea-Risk, said rising import costs were likely to outweigh Senegal’s gains from higher oil prices, while Adam Vulliamy, an underwriter at insurer Atrium, said sovereign defaults were “almost inevitable” as a result of the high oil prices, particularly among import-dependent countries already under strain before the war.

Refining cushions Nigeria

Nigeria has felt both sides of the shock. Pump prices rose 39.5% at the height of the crisis, the sharpest increase in Africa, according to the Major Energies Marketers Association of Nigeria (MEMAN), IntelliNews reported in July.

Domestic refineries, led by the Dangote Petroleum Refinery, supplied about 79% of the petrol available in the first half of 2026, MEMAN estimated, Leadership reported, while Dangote’s own share of supply rose to 81.7% by the end of the review period from 38.9% in 2025. MEMAN said the growing role of domestic refining had reduced Nigeria’s exposure to the freight and import cost pressures faced by countries still dependent on imported fuel.

Yinka Ogunnubi, president of the Association of Corporate Treasurers of Nigeria, said in April that the impact of the Dangote refinery had been underrated and that without it the country would be “in a real mess right now”.

Nigerian jet fuel exports to Europe tripled during the summer disruption to provide almost a fifth of European imports, according to the International Energy Agency.

See IntelliNews: Kenya tea exports disrupted as Middle East shipping crisis leaves stocks stranded in Mombasa
See IntelliNews: Nigeria’s Dangote Refinery benefits from Middle East war as fuel imports dry up
See IntelliNews: India’s fuel exports to Africa hit a record as Europe shuts itself out