The Israel-Iran conflict is sending shockwaves through African markets, particularly those dependent on imported oil, as rising prices and potential supply chain disruptions threaten to exacerbate inflation and economic instability across the continent.
Analysts warn a prolonged conflict could trigger inflationary pressures and fuel shortages, further destabilizing economies already grappling with global uncertainties.
The conflict between Israel and Iran is already pushing up crude oil prices, and raising fears of potential supply disruptions in the Middle East.
According to Goldman Sachs' recently revised assessment of geopolitical risk in oil markets, Brent crude prices could climb by 10 dollars per barrel. Experts caution that if the Strait of Hormuz, a critical oil transit chokepoint that's controlled by Iran, is disrupted, prices could skyrocket.
"The prices for energy goods like oil, petroleum is going to rise and that is going to affect many African countries that primarily rely on fossil fuel to run their industries and to power their cars in the transport industry and factories," said Mustafa Ali, an international relations expert.
Oil importing countries across sub-Saharan Africa could face soaring fuel costs, which is feared could drive up inflation and strain foreign exchange reserves.
"Africa has to take up strategic repositioning to understand the dynamics of the conflict and what it means for them domestically and this means talking to populations around what is expected and what the likelihood of this conflict is going to be," said Cavince Adhere, an economic analyst.
Some analysts argue that the strikes will undermine global stability.
"We have no future in unilateralism, we have no future in hegemony, we have no future in preemptive attack, our future is in a strong multilateral order," said Peter Kagwanja, president and CEO of Africa Policy Institute.
On June 13, Israel launched airstrikes on Iran, targeting senior military officials, nuclear scientists, and civilians. In response, Iran retaliated with missile and drone strikes on Israeli locations, escalating an ongoing conflict marked by casualties and significant damage on both sides.
African analysts warn of potential disruptions to trade as Israel-Iran tensions escalate
African analysts warn of potential disruptions to trade as Israel-Iran tensions escalate
African analysts warn of potential disruptions to trade as Israel-Iran tensions escalate
