Kenyans could face renewed pressure at the pump next month if the Red Sea crisis continues to disrupt global oil supplies, even as crude oil prices keep shooting.

🇰🇪 Breaking It Down

The government, through the Ministry of Foreign Affairs, expressed concerns over the growing security threats in the Middle East that have resulted in the closure of both the Strait of Hormuz and the Red Sea.

Tensions in the Middle East have escalated in recent weeks, with fighting involving Iran, the United States and their allies raising fears of wider disruption to global energy supplies.

On July 20, Yemen’s Iran-aligned Houthi rebels announced a naval blockade targeting Saudi-linked shipping in the Red Sea, threatening the Bab al-Mandeb Strait, a key route for oil and international trade.

📌 What You Need to Know

The latest escalation comes after months of instability around major shipping routes, including the Strait of Hormuz and the Red Sea, where attacks and threats against commercial vessels have increased pressure on global oil markets.

Shipping companies and insurers have often raised shipping costs whenever the U.S.-Israel war on Iran has resulted in the closure of the key waterways.

As a result, this pushes up import prices of crucial commodities like fuel and fertiliser.

"These new attacks and the threat to freedom of navigation in the Red Sea and Bab al-Mandab Strait could worsen the already dire situation by disrupting supply chains, particularly for oil and fertiliser, constraining international trade; and driving up maritime insurance and freight costs,” PCS Musalia Mudavadi said.

Ordinarily, the government calculates fuel prices using averages of the landing costs of all shipments up to the 10th of every month. This means ships arriving over the next 16 days will still factor in next month's cycle.

According to Mudavadi, the government is banking on its G-to-G fuel import deal with Saudi Arabia to shield Kenyans from potential petroleum price shocks.

📰 Source: Kenyans.co.ke