Africa sees winners and losers as Iran war pushes up oil prices
Summary
The war on Iran, starting in late February, has caused oil prices to rise sharply, affecting many African countries. Oil-rich African countries have gained financially, while countries like Kenya, which import most of their fuel, face higher costs and economic difficulties.Key Facts
- The conflict began on February 28 and has driven up global oil prices.
- Kenya imports over 70% of its refined fuel and has seen diesel prices rise about 24%, now costing around $1.60 per liter.
- Kenyan motorcycle taxi drivers, like Eric Wainaina, have seen their income drop by half due to higher fuel costs and fewer customers.
- Oil-producing African countries benefit from high prices, while others face growing deficits and subsidy costs.
- Kenya might seek a $600 million loan from the World Bank to manage the economic impact.
- The International Energy Agency calls this the worst oil supply shock ever, with a 14.5 million barrel per day drop in global oil production, about 57%.
- Africa produces about 12% of the world’s oil reserves but still imports most of its refined fuel because it lacks enough refining capacity.
- Experts warn Africa could face a large fuel shortage by 2040 if refining capacity doesn’t improve.
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