Africa’s Fuel Shield: How Trade Diplomacy Can Protect Economies from the Gulf Energy Crisis

By Emmanuel Bewaji Elemo, Doctoral Scholar, RUCST

elemoemmanuel3@gmail.com

A conflict in the Gulf can arrive at an African household through the fuel pump, transport fares, electricity bills, food prices and the national budget. The escalating confrontation involving the United States and Iran therefore presents Africa with more than a foreign policy problem. It is an energy security, trade, inflation, fiscal management and household welfare challenge.

On 12 August 2026, Brent crude traded around US$89.66 per barrel, while shipping through the Strait of Hormuz remained severely disrupted. Reuters reported only eight vessel movements through the Strait on Tuesday, compared with approximately 130 to 140 daily before the conflict.

Africa cannot determine the decisions of Washington or Tehran, but it can determine how vulnerable its economies remain. Trade diplomacy must therefore become part of Africa’s energy security architecture.

The Hormuz Risk

The Strait of Hormuz is one of the world’s most important energy corridors. About 25 percent of global seaborne oil trade passed through it in 2025. More than 110 billion cubic metres of liquefied natural gas also transited the Strait, representing almost one-fifth of global LNG trade.

Table 1: Why the Gulf Crisis Matters

Indicator

Current Evidence

Economic Meaning for Africa

Brent crude, 12 August 2026

About US$89.66 per barrel

Higher petroleum import costs

Hormuz traffic

8 vessels versus about 130 to 140 previously

Greater supply and freight risk

Share of seaborne oil through Hormuz in 2025

About 25 percent

Major exposure of global oil prices

Global energy price forecast for 2026

Up 24 percent

Stronger imported inflation

Fertiliser price forecast for 2026

Up 31 percent

Higher agricultural production costs

Brent 2026 baseline forecast

US$86 per barrel

Sustained pressure on importers

Severe Brent scenario

Up to US$115 per barrel

Major fiscal and foreign exchange risk

Sources: Reuters, International Energy Agency and World Bank.

The World Bank estimates that a geopolitical supply shock causing oil prices to rise by 10 per cent can eventually increase natural gas prices by about 7 per cent and fertiliser prices by more than 5 per cent. Developing economy inflation is projected at 5.1 percent in 2026, one percentage point above the pre-conflict expectation.

Government Initiatives Under Pressure

African governments are pursuing infrastructure, industrialisation, agriculture, healthcare, education, public transportation and employment programmes. Higher petroleum prices can increase the operating cost of all these initiatives.

Petroleum-importing countries require more foreign exchange to purchase the same quantity of fuel. This can weaken reserves, pressure currencies and increase debt servicing challenges.

Governments may attempt to protect citizens through subsidies or tax reductions. However, broad fuel subsidies can consume resources required for hospitals, schools, roads and social protection. The World Bank therefore recommends rapid and temporary support targeted towards the most vulnerable households rather than widespread untargeted subsidies.

Trade, Business and Household Effects

Table 2: How the Energy Shock Travels Through African Economies

Stakeholder

Immediate Impact

Wider Consequence

Government

Larger petroleum bills

Fiscal and foreign exchange pressure

Manufacturers

Higher electricity and transport costs

Higher product prices and weaker competitiveness

Farmers

Higher fertiliser and fuel costs

Increased food prices

Exporters

Higher freight and logistics costs

Reduced export competitiveness

Transport operators

Higher petrol and diesel costs

Increased fares

Households

Higher food, fuel and transport prices

Reduced disposable income and savings

Fertiliser deserves particular attention. More than 30 per cent of global urea trade and about 20 per cent of ammonia and phosphate trade normally pass through Hormuz. The energy crisis can therefore develop into a food security crisis.

Trade Diplomacy as Africa’s Fuel Shield

Africa should respond collectively rather than through fifty-four isolated national strategies.

            •           Coordinate petroleum procurement. African importers should explore pooled purchasing, longer supply contracts and coordinated negotiations on prices, freight, insurance and credit.

            •           Deepen intra African petroleum trade. Nigeria, Angola, Algeria, Libya and other producers should become more strongly connected to African refining and distribution systems. Afreximbank’s US$3 billion revolving intra African oil import financing programme provides an existing foundation for this strategy.

            •           Use AfCFTA for energy security. Petroleum products, gas, fertiliser and energy equipment should move more efficiently between African countries.

            •           Expand refining and storage. Africa should increase commercially viable refining capacity and establish strategic petroleum reserves capable of cushioning temporary global disruptions.

            •           Strengthen Gulf diplomacy. The African Union and regional blocs should negotiate energy supply, investment, shipping and emergency arrangements with Gulf producers while supporting peaceful diplomatic resolution between the United States and Iran.

            •           Accelerate energy diversification. Solar, hydroelectricity, natural gas, efficient public transportation and other renewable technologies can gradually reduce exposure to imported petroleum volatility.

Conclusion

The Gulf crisis carries a powerful lesson for Africa. Energy security can no longer be separated from trade diplomacy, fiscal policy, food security and household prosperity.

Africa possesses petroleum, natural gas, refining potential, financial institutions and a continental market. What it lacks is sufficient coordination.

The continent may not control the confrontation between the United States and Iran, but it can control its economic preparedness.

The author, in collaboration with Prof. Samuel Lartey and the Private Education Foundation Ghana, interviewed selected households and businesses to assess the conflict’s economic impact and identify practical measures for mitigating its effects. It was concluded that Africa must transform trade diplomacy into a fuel shield by coordinating procurement, expanding intra-African energy trade, strengthening refining and strategic reserves, protecting vulnerable households and accelerating energy diversification.

The ultimate objective must be simple: a Gulf crisis should never automatically become an African inflation, trade and household crisis.