For many political and business leaders in Africa, the current conflict around Iran still feels geographically distant. It is unfolding in a complex Middle Eastern security environment that, at first glance, appears removed from the day-to-day realities of African economies.  

That perception is understandable. African markets have historically shown resilience in the face of external geopolitical shocks, and global systems often adapt over time. Yet the experience of the Ukraine war in 2022 demonstrated that conflicts far from the continent can still generate significant ripple effects through energy markets, logistics networks and financial systems.  

The escalating confrontation involving Iran, Israel and the United States carries similar potential. The United Nations (UN) has already cautioned that the crisis could widen if tensions intensify.  

For Africa, particularly the Horn of Africa and East Africa, the relevance of the conflict lies in how global trade and energy systems respond to uncertainty in the Gulf region.  

African economies typically experience such shocks indirectly. The transmission channels are usually oil prices, maritime shipping routes, insurance premiums, trade finance conditions and foreign exchange liquidity.  

One reason the conflict deserves attention is the strategic importance of the waterways surrounding Iran. The Strait of Hormuz remains one of the most important energy corridors in the global economy. According to the U.S. Energy Information Administration, more than a quarter of global seaborne oil trade passed through the strait in 2024 and early 2025.  

When security risks rise in that corridor, markets tend to respond quickly, often through pricing mechanisms, long before any physical disruption occurs.  

Recent maritime advisories illustrate how this process unfolds. Shipping authorities have reported increased military activity in the Gulf region, including electronic interference affecting navigation systems and missile or drone incidents targeting vessels operating in the wider theatre.  

Importantly, these warnings do not necessarily mean shipping lanes will close. In most cases, global trade continues to flow. What tends to change instead is the cost and complexity of moving goods.  

Ships may slow down, reroute or face higher war-risk insurance premiums. Freight rates increase, while financial institutions involved in trade finance apply more stringent compliance checks. Each adjustment may appear marginal on its own, but together they gradually increase the cost of doing business.  

Early signals in global markets suggest that risk is already beginning to reprice around the conflict. Oil prices have risen as traders factor in the possibility of disruption to energy flows through the Strait of Hormuz. At the same time, maritime insurers and shipping companies have begun adjusting war-risk premiums and routing decisions in parts of the Gulf and Red Sea corridors.  

These shifts may not halt trade outright, but they will increase the cost and complexity of moving energy and goods across global supply chains. For economies in the Horn of Africa and East Africa, the first local indicators will be tighter foreign-exchange liquidity as fuel import bills rise, higher freight and insurance costs on cargo entering ports such as Mombasa or Djibouti, slower trade-finance processing as banks increase compliance scrutiny, and potential volatility in tourism, aviation and remittance flows linked to the Gulf.  

The Horn of Africa’s exposure is largely geographical. The region sits adjacent to the Bab el-Mandeb Strait, a critical corridor linking the Indian Ocean to the Red Sea and the Suez Canal. For decades, the Horn has also been closely connected to developments in the Gulf through security relationships, port investments, labour migration and energy supply chains.  

Recent disruptions in the Red Sea over the past two years have already demonstrated how quickly shipping patterns can shift. Vessels have rerouted, insurance premiums have increased, and freight costs have risen. Trade rarely stops altogether, but the reliability and cost of logistics change.  

Kenya imported just over nine million cubic metres of petroleum products in the 2023/24 financial year, highlighting the region’s reliance on imported fuel. The Port of Mombasa, meanwhile, functions as a major gateway for the wider region, handling more than 41 million tonnes of cargo in 2024, including large volumes of transit trade serving neighbouring countries.  

Ethiopia’s position further highlights the region’s logistical sensitivity. As a landlocked economy, more than 95 per cent of its trade moves through the Addis Ababa–Djibouti corridor. Changes in maritime logistics, shipping costs or insurance conditions in the Red Sea inevitably influence the cost and reliability of that route. Which will inevitably lead to an increase in energy prices, for example.  

Energy price increases translate into higher demand for US dollars. Shipping disruptions raise freight and insurance costs. Banks tighten compliance procedures in trade finance transactions. Lead times lengthen as vessels reroute or slow transit speeds.  

These pressures eventually show up in balance sheets through higher operating costs, tighter foreign-exchange conditions and more complex supply chains.  

Even sectors that appear distant from geopolitical tensions are not immune. Banks may face longer settlement timelines and stricter compliance checks in cross-border payments. Telecommunications companies see higher operating costs where network resilience relies on diesel backup power. Manufacturers experience rising input costs as fuel, freight and insurance expenses increase simultaneously. Tourism and aviation can also feel early effects when airline routes change or travel confidence weakens, affecting foreign-exchange inflows and hospitality demand.  

Over time, these pressures can trigger broader structural adjustments. Higher energy prices feed into fertiliser production and agricultural supply chains, influencing food prices in import-dependent markets. Tighter global financial conditions may slow infrastructure  

investment, particularly where Gulf capital has played an increasingly prominent role in ports, logistics, and energy projects. Governments facing rising import bills and foreign-exchange pressure may also respond through policy adjustments, from tighter FX allocation to subsidy changes or import controls.  

None of this implies that the conflict will necessarily escalate into a worst-case scenario. Global markets often stabilise, and trade routes eventually adjust. But risk is already being repriced.  

For African executives, the task is not to predict how the conflict will unfold. It is to recognise how global systems are responding to the uncertainty and to adjust planning assumptions accordingly.  

Geography may place the conflict far from Africa’s borders. Economics will ensure its effects don’t stay there.