Rising oil prices threaten Tunisia’s economy amid Middle East tensions

Tunisia is increasingly exposed to the economic fallout of the ongoing Middle East tensions, mainly owing to the country’s reliance on imported energy, Al Jazeera reported on March 17. 

The current sharp spike in global oil prices ($103 per barrel), up from $70 before the US and Israel attacked Iran, has severely strained Tunisia’s budget and threatened to unsettle its bond markets, as the country struggles to maintain extensive energy subsidies

At Radès port, the country’s main hub for fuel imports, the impact of global energy disruptions is already. While Tunisia reduced energy imports by 6% year-on-year (y/y) in 2025 as part of efforts to curb the trade deficit, early indicators for 2026 suggest a slight increase in the energy bill.

The 2026 budget is based on an oil price range of $63–68 per barrel. However, global volatility has pushed energy import costs higher, with a 3.9% rise recorded in January and a 1.7% increase over the first two months of the year.

Energy remains a key driver of Tunisia’s trade deficit, which reached TND 21.8bn ($6.94bn) in 2025. Every $1 increase in oil prices above budget assumptions adds around TND 160mn to public spending.

A prolonged disruption in the Strait of Hormuz could trigger a global oil shock, potentially pushing Tunisia’s budget deficit to TND 9bn and raising inflation by up to 1.7%. A broader international escalation could have even more severe consequences, with additional costs reaching TND 14bn and inflation rising by 2.6%. With oil prices already surpassing $100 per barrel, pressure is mounting on household purchasing power, as higher energy costs feed into transport and consumer prices.

Authorities say they are prepared to manage potential shocks, but the economy remains highly vulnerable to prolonged volatility in global energy markets.