Every litre of fuel to Kenya passes through a 33km gap in the Middle East. Here's why that should worry you.
The last time fuel prices surged past KSh 200 per litre in Nairobi, matatu operators announced fare hikes within hours. Factory owners warned of higher production costs. Supermarket shelves adjusted. The trigger, however, was not a decision made in Kenya.
For Kenya, a net oil importer whose entire petroleum supply arrives by sea, what happens in the Strait of Hormuz, which is currently facing closure as the Middle East conflict intensifies, eventually shows up in what you pay for transport, food, electricity, and manufactured goods.
The Strait of Hormuz is a narrow waterway connecting the Persian Gulf to the Gulf of Oman and, from there, to the world's open oceans. At its narrowest, it is only about 33 kilometres wide — but it is the only maritime exit for the Persian Gulf's oil-producing nations: Saudi Arabia, Iraq, Kuwait, the UAE, Iran, and Qatar.
Roughly 20 percent of the world's entire oil supply transits this single waterway every day. That amounts to between 17 and 21 million barrels of crude oil daily. On top of that, Qatar — the world's largest exporter of liquefied natural gas (LNG) — ships most of its LNG through Hormuz to energy-hungry markets in Europe and Asia.
Unlike most geographic bottlenecks, there is no meaningful bypass. You cannot reroute Gulf oil around the Strait the way you can reroute Red Sea cargo around the Cape of Good Hope. The Persian Gulf has one door, the Strait of Hormuz.
Who controls it — and who threatens it?
Iran sits on the northern coast of the Strait and has, for decades, used the threat of closure as its most potent geopolitical lever. Whenever Western nations tighten sanctions on Tehran, Iranian officials warn that they can shut the waterway and choke the global economy.
In practice, full closure is difficult. Iran itself exports oil through the Strait and would harm its own economy by closing it indefinitely. The United States maintains a major naval presence in the region — the Fifth Fleet based in Bahrain — specifically to keep the waterway open. But partial disruptions, tanker seizures, and naval standoffs have occurred repeatedly and, each time, global oil markets respond immediately.
The broader region's instability matters too. The Houthi attacks on Red Sea shipping in 2024 and 2025 — while not directly in the Strait — demonstrated how a single non-state actor can reshape global shipping routes and insurance premiums. The Strait of Hormuz is a far more consequential chokepoint, with far more powerful actors involved.
What This Means for Kenya
Kenya's fuel supply runs directly through it
Kenya has a government-to-government fuel supply agreement with three Gulf state oil companies — Saudi Aramco, the Emirates National Oil Company (ADNOC), and Abu Dhabi National Oil Company — extended through 2027. Every drop of that fuel transits the Strait of Hormuz before it reaches the Mombasa port.
Kenya imports virtually all of its petroleum needs. The country's petroleum import bill consistently ranks as one of the largest single items on its import ledger — at times consuming nearly a quarter of total import costs. This makes Kenya acutely vulnerable to any price movement at the source.
The pump-to-matatu-to-market transmission chain
When global oil prices spike — whether from Hormuz tensions, production cuts, or conflict — the impact reaches Kenyans through a fast and well-worn transmission chain.
First, landed fuel costs rise at Mombasa port. The Energy and Petroleum Regulatory Authority (EPRA) then revises pump prices on its regular monthly schedule. Matatu and bus operators — operating on thin margins — pass the increase to commuters almost immediately, with fare hikes that can range from 15 to 30 percent. Truckers transporting goods across the country face higher diesel bills, which they build into freight charges. Manufacturers and wholesalers absorb higher input costs and adjust retail prices. By the end of the chain, the shopper in a Nairobi supermarket or a Kisumu open-air market is paying more for goods that have nothing to do with oil.
This is the Strait of Hormuz effect on ordinary Kenyan life — not in the form of news bulletins about Iranian warships, but in the form of a conductor announcing a higher fare before you've even sat down.
The shilling double squeeze
Kenya faces a compounding vulnerability that wealthier, oil-producing nations do not. When oil prices rise globally, Kenya must spend more dollars to import the same amount of fuel. This puts pressure on its foreign exchange reserves and, in turn, on the Kenyan shilling.
A weaker shilling then makes those dollar-denominated imports even more expensive — a self-reinforcing cycle. Countries like the United States, which now produces much of its own oil, face this pressure far less acutely. For Kenya, a Hormuz crisis is a double squeeze: higher global prices and a depreciating currency, simultaneously.
Kenya's trade with the Gulf — beyond fuel
Kenya's exposure to the region extends beyond petroleum. The Gulf states are significant destinations for Kenyan exports, particularly tea, which Kenya ships to markets including Iran and the broader Middle East. The UAE serves as a re-export and trade finance hub for Kenyan businesses with Asian supply chains.
Diaspora remittances — a crucial source of foreign exchange for Kenya — also flow heavily through Gulf-based financial networks, from the large Kenyan communities working in Saudi Arabia, the UAE, and Qatar. A regional crisis that disrupts Gulf economies reduces remittance flows and tightens the foreign exchange position that Kenya depends on to service its import bill.
Kenya's vulnerability to Hormuz shocks is structural, but not without mitigation. The most immediate buffer is a strategic fuel reserve holding a larger stockpile at Mombasa would buy time during supply disruptions and reduce panic-driven price spikes. Beyond that, accelerating the development of Kenya's renewable energy capacity, particularly geothermal and solar, directly reduces the economy's dependence on imported petroleum for electricity generation.
On the trade side, diversifying fuel supply agreements beyond Gulf-state companies including exploring East African regional energy cooperation would reduce single-region exposure. None of these are quick fixes, but awareness of the Hormuz risk is itself the first step toward building the resilience Kenya needs.
