MWE Correspondent
Global oil prices jumped by more than five percent after the United States and Iran exchanged fresh military strikes, triggering fears of supply disruptions through the Strait of Hormuz and sending shockwaves across international financial and energy markets.
Brent crude and U.S. West Texas Intermediate (WTI) crude recorded sharp gains as investors rushed to price in the growing risk of a wider conflict in the Middle East, a region that supplies nearly one-third of the world’s crude oil. The surge reflected mounting concerns that any prolonged military confrontation could interrupt one of the world’s most critical energy corridors.
The latest increase pushed international crude prices from approximately Sh203,000 to nearly Sh214,000 per barrel, adding fresh pressure on countries already grappling with inflation and rising fuel costs.
Market analysts said investors were responding not only to the military exchange itself but also to the possibility that the conflict could spread beyond Iran, drawing in other Gulf nations and disrupting regional oil production and exports.
At the centre of the concern is the Strait of Hormuz, a narrow waterway linking the Persian Gulf to global markets. Nearly 20 percent of the world’s traded oil and a significant share of global liquefied natural gas (LNG) exports pass through the strategic shipping lane every day. Any disruption to vessel movements could immediately affect energy supplies across Asia, Europe and North America.
Although shipping traffic has not been completely suspended, insurance costs for commercial vessels operating in the Gulf have already begun rising as shipping companies reassess security risks. Several international maritime operators have reportedly increased security measures or reviewed sailing schedules as military activity intensified around the region.
The renewed conflict has also fuelled volatility across global financial markets. Airline shares declined amid expectations of higher jet fuel costs, while transport, manufacturing and logistics companies warned that sustained increases in oil prices could raise operating expenses and place additional pressure on supply chains.
Economists caution that if tensions continue, higher crude prices are likely to translate into increased prices for petrol, diesel and aviation fuel in many countries, potentially slowing economic growth and complicating efforts by central banks to control inflation.
For oil-importing nations across Africa, including Tanzania, Kenya and Uganda, a prolonged surge in global oil prices could eventually result in higher domestic fuel prices, increased transport costs and rising prices for food and other essential commodities. Governments may also face additional pressure to manage inflation while protecting consumers from the impact of imported energy costs.
Also Read, Beyond The Dollar: The New Financial Power Shift
Energy experts note that previous geopolitical crises involving the Strait of Hormuz have caused significant spikes in oil prices, but the duration of those increases has largely depended on whether shipping routes remained open and diplomatic efforts succeeded in easing tensions.
Meanwhile, major oil-producing countries and international organisations continue to monitor developments closely. The Organization of the Petroleum Exporting Countries (OPEC) and its allies have not announced any immediate changes to production levels, while governments around the world have called for restraint to prevent further escalation.
Analysts say markets will remain highly sensitive to developments in the coming days. Any further attacks on energy infrastructure, commercial vessels or export terminals could push oil prices even higher, with far-reaching consequences for the global economy, inflation and energy security.
As military tensions between Washington and Tehran continue to intensify, investors, governments and consumers alike are watching the Strait of Hormuz, where the security of one of the world’s most important energy lifelines has once again become a central concern.
