US-Iran War: African Economies Feel the Heat as Oil Tops $100
By Eyo Nsima
African economies are facing sharply higher energy and logistics costs following the escalation of the US-Iran conflict, with crude oil prices climbing above $100 per barrel and exposing the continent’s continued vulnerability to external energy shocks.
Brent crude stood at $104.70 per barrel on Friday, while West Texas Intermediate (WTI) traded at $99.54. Murban crude was quoted at $120, OPEC Basket at $114.90 and the Indian Basket at $116.
The price surge has created a mixed picture for Africa. Major oil producers such as Nigeria, Angola and Algeria could record higher export earnings and government revenues, while countries that depend heavily on imported crude and refined petroleum products face rising import bills.
For Nigeria, higher crude prices offer a potential fiscal boost if the country can sustain production. But consumers and businesses are also exposed to increased fuel and operating costs.
The country’s downstream market has already recorded significant movements. Petrol prices reached N1,300 per litre at some Lagos depots on Friday, while diesel prices approached N2,000 in parts of the market.
Nigeria’s expanding refining capacity could, however, provide some protection against international supply disruptions. The Dangote Petroleum Refinery is increasing crude purchases as it ramps up operations, creating the potential for Nigeria to reduce imports and become a larger supplier of refined products to other African markets.
Angola and Algeria are also positioned to benefit from higher hydrocarbon prices through increased export receipts. Algeria could additionally benefit from stronger demand for its natural gas as international buyers seek alternative supplies.
For oil-importing economies, the outlook is more difficult.
Countries including Kenya, Ethiopia, Ghana, Egypt and South Africa face higher costs for imported petroleum products, transportation and industrial inputs. The impact could feed into food prices and consumer inflation because fuel is central to agriculture, manufacturing and logistics.
Egypt faces an additional challenge because prolonged regional instability could affect shipping activity and revenues associated with the Suez Canal, while higher energy prices increase its import burden.
The continent’s heavy dependence on diesel makes the situation particularly significant. Diesel powers transport fleets, farms, mines, factories and backup generators, meaning sustained price increases can raise production costs across the economy.
The conflict is therefore highlighting the need for African countries to strengthen domestic energy systems rather than rely excessively on imported fuels.
Investment in refineries, natural gas, renewable energy, storage, pipelines and regional electricity networks could reduce exposure to future international supply shocks.
For Africa’s oil producers, the immediate priority is to convert higher prices into productive investment and stronger energy infrastructure. For import-dependent countries, the crisis underscores the urgency of diversifying energy sources and reducing exposure to volatile global markets.
The US-Iran conflict has thus produced a clear divide across Africa: exporters have an opportunity to capture higher revenues, while importers face a growing cost burden. The longer the disruption persists, the more important domestic energy capacity will become.
