Oil prices hit Sh15,351 per barrel as Middle East war jolts markets

Global oil prices have surged to their highest level in nearly three years, climbing above Sh15,352 (USD 119) per barrel amid escalating conflict in the Middle East, raising fears of supply disruptions and renewed inflationary pressure across the world

The sharp rise in crude prices follows the widening war involving the United States, Israel and Iran, which has unsettled energy markets and threatened key oil infrastructure and shipping routes in the Persian Gulf.

Analysts say the spike is largely driven by concerns that the ongoing war could disrupt the flow of crude through the Strait of Hormuz, a critical maritime corridor that handles roughly one-fifth of the world’s oil shipments.

Many African economies, including Kenya, rely heavily on imported petroleum products, meaning any sustained increase in crude prices could translate into higher pump prices, rising transport costs and increased pressure on household budgets.

Brent crude briefly jumped above $119 a barrel, marking the highest level since mid-2022, as traders reacted to fears of tightening global supply.

Oil benchmarks surged more than 13 per cent in a single trading session, with Brent crude and U.S. West Texas Intermediate both recording one of their biggest daily increases in years.

Any prolonged disruption in the narrow waterway could severely constrain supply to global markets.

Recent attacks on oil infrastructure and refineries across the Gulf region have further heightened market anxiety.

Several producers in the region have also reduced output amid security concerns and logistical challenges, tightening supplies at a time when demand remains relatively strong.

The surge in crude prices has already rattled financial markets. Global stock markets declined sharply as investors weighed the economic fallout of higher energy costs.

Airlines and manufacturing firms, which are heavily exposed to fuel prices, were among the hardest hit sectors.

Economists warn that sustained high oil prices could fuel inflation worldwide and slow economic growth. Higher fuel costs typically push up transport and production expenses, which are eventually passed on to consumers through higher prices for goods and services.

For oil-importing countries, the price spike presents an even greater challenge.

Governments and international agencies are closely monitoring the situation. Some countries have already begun considering emergency measures, including the release of strategic petroleum reserves, to cushion markets from further shocks.

Market analysts caution that prices could climb even higher if the conflict escalates or if shipping routes in the Gulf remain disrupted.

In worst-case scenarios, oil could surge beyond $150 a barrel, potentially triggering a broader global energy crisis.