Escalating hostilities in the Middle East following coordinated US and Israeli strikes on Iran have cast a long shadow over Kenya’s trade with the Gulf, valued at more than Sh700 billion. The killing of Iran’s Supreme Leader, Ayatollah Ali Khamenei, triggered swift retaliation across the region, with attacks reported in several Gulf states, flights grounded and oil tankers halting passage through the Strait of Hormuz.
The fallout has already jolted energy markets. Brent crude climbed by 10 per cent to around $80 a barrel, with some regional leaders warning prices could surge to $100. For Kenya, which depends heavily on imported fuel, any sustained spike would quickly feed into inflation. Diesel underpins transport, electricity generation and farming, while kerosene remains a staple for cooking and lighting in many homes.
Rising insurance premiums and freight charges are compounding the pressure. Shipping insurers have reportedly lifted cover costs by up to 50 per cent for vessels transiting the Gulf, reflecting fears of further attacks. These additional costs are likely to be passed down the chain, inflating the price of imported goods.
Investments, Trade and Industry Cabinet Secretary Lee Kinyanjui cautioned that prolonged instability in Saudi Arabia, the United Arab Emirates and Bahrain would directly affect Kenya’s exports, which reached Sh165 billion in 2024. Kenya supplies tea, coffee, meat, flowers and re-exported jet fuel to the region. Disruption could dent earnings for farmers, logistics firms and oil marketers.
Imports are equally exposed. Goods worth about Sh554 billion, including fuel, fertiliser, machinery and electronics, flow into Kenya from the Gulf annually. Any interruption threatens supply chains and domestic price stability.
Air travel has also been hit. Major hubs such as Dubai and Doha suspended operations, with thousands of flights cancelled worldwide. Kenya Airways halted flights to Dubai and Sharjah indefinitely. The disruption jeopardises exports of perishables such as flowers, fruit and vegetables, and could also slow the lucrative re-export of jet fuel from Jomo Kenyatta International Airport. Jet fuel re-exports have become one of Kenya’s top foreign exchange earners, surpassing Sh100 billion annually.
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The conflict may also strain Kenya’s fuel supply agreement with Saudi Aramco, Emirates National Oil Company and Abu Dhabi National Oil Company. The arrangement guarantees steady supplies under a 180-day credit framework designed to ease pressure on foreign exchange reserves. However, with more than a fifth of global oil shipments passing through the Strait of Hormuz, prolonged disruption could unsettle the pricing structure agreed under the deal.
Data shows Kenya’s exports to the Middle East nearly doubled in three years, rising to Sh164.65 billion in 2024 from Sh84.96 billion in 2022. The UAE remains the largest destination, followed by Saudi Arabia, Yemen and Iran. On the import side, Kenya purchased Sh554.45 billion worth of goods from the region in 2024, down slightly from Sh616.32 billion the previous year, with the UAE accounting for the lion’s share.
As tensions harden and markets react, Kenya finds itself exposed to geopolitical tremors far beyond its borders. In an interconnected global economy, distant conflicts have an uncanny way of showing up at the local petrol pump and on supermarket shelves.
