The war on Iran and its reverberations in the Horn of Africa

When the conflict in the Middle East escalated, its immediate consequences were not unforeseen. The region, long intertwined with the Middle East through historical, economic, and strategic ties, was structurally exposed to such shocks. Across the Horn of Africa, the economic and humanitarian repercussions of the Iran–Israel–U.S. war are already unfolding. While the initial pressure originates in energy markets, its effects cascade outward - disrupting shipping routes, constraining trade flows, inflating food prices, and straining already shrinking aid systems.

At the center of this chain reaction lies a well-established reality: the Strait of Hormuz remains one of the world’s most critical energy chokepoints. According to the International Energy Agency, approximately 20 million barrels of crude oil and petroleum products pass through the strait each day, accounting for roughly a quarter of global seaborne oil trade, alongside a substantial share of liquefied natural gas flows. When such a vital corridor is threatened, the consequences are immediate and far-reaching, first manifesting in global price volatility, then translating into higher import costs for fuel-dependent economies. The Horn of Africa absorbs these shocks more acutely than other regions, largely because it lacks the fiscal and institutional buffers necessary to mitigate them.

The closure, or even the perceived instability, of this strategic artery has produced tangible effects across the region, most visibly through surging fuel prices and rising costs of basic commodities. In Somaliland, these dynamics have been particularly stark. Prior to the conflict, petrol was priced at approximately 8,500 Somaliland shillings per litre. Following Iran’s announcement regarding the closure of the Strait of Hormuz, prices rapidly climbed. Government intervention initially imposed a cap of 9,700 shillings per litre, but this measure proved ineffective. Prices continued to rise, prompting authorities to revise the cap to 12,500 shillings. Currently, petrol prices have reached around 13,000 Somaliland shillings per litre, an increase of over 50 percent.

This raises a question: to what extent is the state capable of regulating markets under crisis conditions? The evidence indicates that government intervention has been consistently undermined by entrenched private sector actors. Somaliland’s economy is heavily influenced by a small number of dominant actors, many of which maintain close ties to political class. These actors exercise disproportionate control over pricing, limit competition, and effectively capture regulatory mechanisms. As a result, market outcomes increasingly reflect private interests rather than public welfare. The burden of this distortion falls most heavily on ordinary citizens.

Reporting in late March indicated that fuel prices in parts of Somalia had more than doubled as the war disrupted oil and gas shipments through the Strait of Hormuz. The immediate impact was felt most acutely by those whose livelihoods depend on daily mobility - Bajaj drivers, minibus operators, and small-scale traders. For these groups, rising fuel costs present an immediate and inescapable dilemma: absorb the increase and accept shrinking earnings, or pass it on to customers and risk losing demand. In either case, income contracts. What appears as a price fluctuation at the macro level renders, at the micro level, into a direct erosion of livelihoods.

Crucially, this shock landed on a society already under severe structural strain. Humanitarian data indicates that approximately 6.5 million people in Somalia, nearly one-third of the population, were already facing acute food insecurity due to prolonged drought. This fundamentally alters how the fuel crisis should be understood. It is not a disruption imposed on a stable system, rather, it compounds an existing condition of scarcity and fragile purchasing power. The common language of “inflation” risks understating the severity of the situation. The issue is not only rising prices, but the manner in which those increases interact with an economy structured around daily income, and narrow margins of survival. Rising fuel and freight prices increase the cost of imported staples, raise the expense of moving goods inland, and amplify volatility in local food markets. In much of the Horn of Africa, food insecurity is not driven solely by absolute shortages, but by declining affordability. For populations already living at the edge of subsistence, this is sufficient to convert regional instability into immediate, household-level insecurity.

The Review of Maritime Transport 2024 by United Nations Conference on Trade and Development illustrates how rapidly insecurity can reshape global shipping patterns: by mid-2024, traffic through the Suez Canal had fallen by 70 percent, through the Gulf of Aden by 76 percent, and through Bab al-Mandab by 89 percent, while rerouting around the Cape of Good Hope increased by 89 percent. The World Food Programme has described this shift in concrete terms. In April, it warned that the Middle East crisis had triggered the most severe disruption to global shipping since COVID-19 and the 2023 Red Sea attacks. Some cargo routes from the Mediterranean to East Africa were taking up to 20 additional days, as vessels avoided the Red Sea and diverted around the Cape of Good Hope. Charter rates from Aqaba to Port Sudan had doubled compared to April 2024. These developments have direct humanitarian implications: higher operational costs, slower delivery of aid, and reduced capacity for large-scale response.

Developments in Kenya further demonstrate that this is not a crisis confined to the most fragile states. It was recent when a scandal rocked Kenya’s petroleum sector, where top brass were accused of manipulating stock data to manufacture a petroleum shortage crisis, prompting their resignation. Ethiopia had a similar experience. Moreover, reporting in early April indicated that approximately 8 million kilograms of tea were stranded in warehouses in Mombasa due to shipping disruptions, costing the industry an estimated $8 million per week. Additional reports suggested that around 20 percent of Kenya’s 3,100 independent fuel stations were affected by supply shortages.

Sudan represents the most acute expression of this crisis. In a country currently experiencing the world’s worst humanitarian crisis - where hunger, displacement, and a genocidal war already define everyday life - disruptions to aid routes have been costly and far more devastating. Reports indicated that cholera-response supplies destined for several African countries, including Sudan, had already been delayed. Rising freight costs and disrupted shipping have reduced both the volume of aid that can be delivered and the speed at which it can reach those in need.

What emerges, then, is a clear illustration of structural dependency: reliance on imported fuel, on vulnerable maritime corridors, on frail and elongated supply chains, and on humanitarian systems that were already overstretched prior to this escalation. The Horn of Africa is exposed because it is deeply embedded in global economic and logistical systems now under strain. Unlike wealthier economies, it lacks the financial buffers, diversified supply partners and trade routes, and institutions capable of absorbing external shocks. As a result, what manifests elsewhere as market volatility is experienced here as material precarity. If these disruptions persist, their consequences will extend well beyond the aforementioned price increases. They will deepen household indebtedness, erode the viability of emerging small-scale trade - which has been a mainstay of household economies in many capitals across the region - increase the operational costs of humanitarian relief, and intensify political pressures in states already characterized by institutional fragility and limited social protection.

These dynamics explain why the Horn of Africa is experiencing the effects of this conflict with particular severity. Its vulnerability is rooted in dependence on exposed maritime systems, limited preparedness for large-scale external shocks, and governance systems that struggle to mitigate their impact. The region may lie far from the battlefield, but through interconnected systems of fuel, shipping, trade, and aid, it is already living the consequences of a war it neither initiated nor controls.