Kenya moves to cushion economy from Middle East conflict shocks

President William Ruto said on Monday that the government is taking steps to mitigate supply chain disruptions stemming from the ongoing conflict in the Persian Gulf, as rising global oil prices and logistical challenges ripple through the economy.

Ruto said Kenya has remained “vigilant” over the past month, with “continuous assessments” by key ministries and agencies. He added that he had received a “comprehensive briefing” from officials overseeing energy, agriculture, trade, and finance, as well as the central bank and private sector stakeholders.

“The ongoing conflict in the Middle East is having a significant impact on the global economy… Africa, including Kenya, is not immune,” he said in a statement.

The government is implementing measures to ensure adequate petroleum supplies and cushion consumers from price shocks, even as international oil prices continue to climb. Ruto noted that a government-to-government fuel procurement arrangement has helped shield Kenyans from immediate price increases while maintaining supply stability. The Ministry of Energy, working with the National Treasury, is also assessing additional interventions to moderate adverse effects.

On agriculture, Ruto said fertiliser supplies are sufficient to support the current rainy season through September, dismissing fears of shortages. However, meat exports have been affected by freight and logistics challenges linked to the conflict. Authorities said the ministries of trade and agriculture will work together to identify alternative solutions for exporters.

Ruto added that the government will continue to monitor developments closely and take “decisive action” to safeguard the economy.

Kenya is not alone in bearing the burden of the Middle East conflict. Countries across the Horn of Africa are experiencing significant disruption, underlining the region’s vulnerability to global energy shocks.

At the centre of the crisis is the disruption of global energy flows through key maritime chokepoints, particularly the Strait of Hormuz, which accounts for roughly 20% of global oil shipments. The escalation of tensions involving Iran and the broader regional conflict has triggered one of the most significant oil supply disruptions in recent decades, driving global fuel prices upward and straining already fragile economies.

Across the Horn of Africa, the consequences have been immediate. Many countries in the region rely heavily on imported refined fuel, making them particularly vulnerable to external shocks. Rising import costs and market uncertainty have led to widespread fuel price increases and, in some cases, outright shortages.

Ethiopia has been among the hardest hit. In recent weeks, the country has faced an acute fuel crisis marked not only by rising prices but also by limited availability. Reports indicate that some institutions have shifted to remote work arrangements to reduce fuel consumption, while authorities in Addis Ababa have introduced emergency measures to manage dwindling supplies. The crisis is particularly severe for the landlocked country, where disruptions in global supply chains translate directly into domestic shortages.

Similarly, Somalia is experiencing a surge in fuel prices, with significant ripple effects across the informal economy. Small businesses and transport operators, including tuk-tuk drivers, have been especially affected as operating costs rise while demand declines. In some cases, fuel prices have more than doubled, forcing many to suspend operations and deepening economic hardship in a country already grappling with drought and food insecurity.

Djibouti, a critical logistics hub for the region, is also facing mounting pressure. While detailed data on shortages remains limited, the government has reportedly adopted conservative fuel management measures to stabilise supply and prevent further strain. Given Djibouti’s strategic role in regional trade, and as a key gateway for landlocked Ethiopia, disruptions there carry wider implications for supply chains across the Horn.

The crisis is unfolding against a backdrop of broader economic vulnerability. The impact of the Middle East conflict extends beyond fuel, affecting food security, inflation, and fiscal stability. Rising energy costs are increasing transportation and production expenses, which in turn are driving up the prices of basic goods across the region.

There is little indication that the conflict will ease in the near term. The risk of further escalation, including potential disruptions to additional shipping routes such as the Red Sea and the Bab el-Mandeb Strait, raises concerns that supply shocks could deepen.

The economies of the Horn of Africa, already among the most vulnerable globally, face heightened risk. With limited domestic energy production, heavy reliance on imports, and ongoing humanitarian challenges, the region remains highly exposed to prolonged external shocks. Unless global supply chains stabilise, the current fuel crisis could escalate into a broader economic and social emergency affecting millions.