Impact of the Middle East crisis on Africa
Israel's and the United States' attack on Iran is causing major changes in the energy market.
Closing of the Strait of Ormuz
This closure deprives the oil market of about 15 to 20 million barrels per day, or 15% of world oil consumption. Only Iranian exports of about 2 million barrels per day can cross the Strait. They are headed mainly for China. Exports from Kuwait and Iraq are essentially at a standstill. For Saudi Arabia there is a possibility to export some of its oil from the Red Sea, but control of the Bab-el-Mandeb Strait by the Houti near Iran probably limits these exports. Similarly, exports from the United Arab Emirates may be made in part from the Gulf of Oman, but the Fujairah facilities are not immune from Iran's strikes. Finally, oil production in the region is for the moment very limited on the one hand because of the inability to export on the other because of the destruction of certain installations by missiles.
As for gas, Qatar, which has the largest liquefaction capacity after the United States, has been partially attacked and is currently shut down. Exports of natural gas passing through the Strait of Ormuz are obviously also interrupted.
The price of crude oil
Since 28 February the US and Israeli attacks began, the price of oil, which was $60 per barrel in mid-February, rose to $70 on the eve of the attacks and then stopped increasing. Some of Donald Trump's statements caused a temporary decline, but early April the price went up again and well over $100 per barrel. It may rise to $150 or more if the Strait of Ormuz remains closed for several weeks.
Oil prices and imported inflation
For African economies, this increase translates directly into an increase in the import bill. Many African countries do not have refineries and therefore depend on imports of diesel and gasoline, refined products even more expensive than crude oil.
Higher fuel prices impact all sectors, including freight, port rights, tourism, food and transport, resulting in additional costs for businesses and consumers.
Slowing economic growth and fuel shortages
A senior regional energy regulator suggested that fuel shortages and war in the Middle East could reduce the growth of African economies by 1-2 percentage points from the initial estimates, and even by 2-3 percentage points if the war persists for two months or more. Prior to the conflict, the African Development Bank expected growth of 4.3% for the African economy in 2026.
Many African countries have fuel reserves only for 15 to 25 days (90 days in the member countries of the International Energy Agency, which brings together the countries of North America, Western Europe and some Asian countries). This potential shortage in the medium term would require some Governments to consider rationing or banning fuel exports.
By way of conclusion
Beyond energy, many sectors of the world economy are affected. The countries of the Persian Gulf are major producers of plastics, fertilizers, critical metals ...
A prolonged closure of the Strait of Ormuz would result in serious disruptions to the global economy.
The SIEPA (International Energy and Oil Show) which will take place on 12 and 13 May in Dakar (Hotel King Fahd) will address all these issues
Register with:
Sekou Diaite Secretary General of ASDEA sekoufantamady@gmail.com
Jean Pierre Favennec, President ADEA, jpfavennec@yahoo.fr
Jean-Pierre Favennec
President
Association for
Development
Energy in Africa
