East African citizens brace for hard times amid Middle East Tensions

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Days after the US and Israel launched attacks on Iran, the high cost of the conflict has started emerging. Tehran has retaliated by targeting US allies, including the United Arab Emirates (UAE), Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq. Oil and gas prices have surged in the aftermath.

The benchmark Brent price jumped more than three percent towards the $84 per barrel on March 5, approaching its highest level since July 2024.

For East Africa, the impact could be staggering if the war continues. This could be manifested in the form of loss of business, incomes, inflation, insecurity, and disruption of supply chains.“East African governments should be concerned about the war, but they should not lose sleep over it, as the economic impact is likely to be short-lived,” says Shani Smit-Lengton, a senior economist at Oxford Economics Africa.“Key transmission channels include higher domestic fuel prices, rising import costs, and supply-chain disruptions affecting both imports and exports, primarily between March and mid-2026.

”These pressures will push up inflation, weigh on business activity, and delay some investment projects.“The impact on investment is especially relevant for countries such as Tanzania and Uganda, which are currently implementing large-scale infrastructure projects,” Shani said.

She said the conflict would lead to a drop in remittances to East Africa through three primary channels, including instability in Gulf labour markets, rising global inflation and fuel prices, and regional disruptions along key maritime routes.“Countries with moderate-to-high dependence on Gulf-based remittances, including Uganda, Somalia, Ethiopia, Eritrea, and South Sudan, are particularly vulnerable, while Kenya and Tanzania, which rely mainly on remittances from the US and Europe, are likely to be less affected,” she said.

About 500,000 Kenyans are working in the Middle East and Kenya said on Friday they should consider leaving via available commercial flights. Uganda has an estimated 300,000 registered migrant workers in Gulf states who contributed $1.69 billion in remittances last year.

A Ministry of Foreign Affairs official said currently they see no big threat to their lives, but are being registered by the Uganda Embassy official in Abu Dhabi.

For the Head of the External Employment Unit in the Ministry of Gender, Labour and Social Development Hillary Talemwa the biggest challenge in the labour externalisation industry is that a big number of migrant workers are smuggled to the Middle East.

Many are working in Qatar, the United Arab Emirates, Kuwait, Bahrain, Jordan, Saudi Arabia, Iraq and Oman,” Talemwasaid.

So far, only 43 students have been evacuated from Tehran by road to Istanbul in Turkey before flying to Entebbe in Uganda. Tehran is the center of the conflict.

The students are part of the major plan of evacuating and facilitating the return of Ugandan nationals trapped in Iran, but the mission remains a big gamble.“It’s a bit complex and difficult to evacuate now,” said John Malimba, Uganda’s junior minister for Foreign Affairs. “We are going to get those that we shall manage to get out [from Iran] and make them safe. We have tried to give advice to our people who are out there to keep being safe, operate from home. We have advised them not to get out to the streets and communicate to our embassies through the internet.”According to the ministry, Ugandan diplomatic missions in the region will deploy officers to receive the evacuees and facilitate their return home through neighboring countries.

The escalating conflict in the region has put these jobs at risk and millions of dollars of remittances and foreign exchange receipts are at stake.

More than 310,000 Kenyans are said to work in Saudi Arabia, 66,000 in Qatar and nearly 30,000 in the UAE. More than 11,500 Tanzanians working in Oman are on high alert following the escalation of war in the Gulf as the Sultanate offered a safe route for escape for expatriates.

At least 1,150 job opportunities in Qatar announced by Tanzania’s Prime Minister's Office Labour, Employment and Relations in February 2026 are now in jeopardy following the war.

Diaspora remittances from Saudi Arabia to Kenya in 2025 were $302 million, followed by the UAE ($125.6 million) and Qatar ($69.7 million).

The conflict has also put Kenya’s trade worth over $6 billion at risk, with ramifications for inflation on costly fuel. Kenya exports tea, coffee, meat and flowers to the Middle East.

Uganda’s take Ugandans do not expect major domestic oil market disruption, as the March shipment has crossed Strait of Hormuz, according to Tonny Otoa, the spokesperson Uganda National Oil Company’s (Unoc).

Unoc believes Vitol Bahrain’s global reach should steady fuel supplies.“Unoc and its supply partner, Vitol, are keenly following the events as they unfold and wish to reassure the public that all appropriate measures are being taken to ensure uninterrupted supply of petroleum products into the country,” Unoc said in a statement.

Uganda needs eight million litres of petroleum per day, but the Jinja strategic reserve storage facility’s capacity is 30 million litres. Other private storage facilities can hedge up to about 20 million litres.

Unoc is also weighing the option of sourcing fuel from Americas, Singapore and India through the Cape of Good Hope, which pushes the waiting time by two weeks as well as pushing costs up.

Supply chain woesIran’s blockade on the Strait of Hormuz, a major shipping route for oil from the Gulf, has caused jitters along the supply chain.

The price of oil is expected go up, impacting inflation.

Three major shipping lines have imposed war-risk and emergency conflict surcharges on African cargo driven by rising tensions in the Middle East.

Mediterranean Shipping Company (MSC), Hapag-Lloyd, and CMA CGM on Thursday announced the beginning of the surcharges with immediate effect often exceeding $1,000–$3,000 per container, cover rerouting costs around the Cape of Good Hope, affecting East, West, and Southern African routes.

With the announcement it means cargo moving from Indian Ocean subcontinent and Gulf States to African ports and Indian Ocean islands will be subjected to the fees.

The move will affect shippers considering annual containerised trade between Africa and the combined Indian subcontinent-Gulf region exceeded $100 billion.

The rerouting of vessels will increase freight costs by as much as 50 percent for regional ports, including Mombasa and Dar es Salaam port.

Political implicationsProf XN Iraki of the University of Nairobi’s Faculty of Business and Management Sciences, said that this crisis will have political implications in the region, where countries have an unemployment problem.“In Kenya, the price of oil and inflation could be a factor in 2027 polls. Add the reduced remittances because of slow down in gulf economies. The shilling could weaken and farther put pressure on prices. Many investors will look for ‘safe dollars’ raising its value against other currencies,” Prof Iraki said.

According to Moody’s, the overall credit outlook depends critically on whether any interruption to the Strait of Hormuz proves short-lived and whether alternative arrangements can preserve energy availability.“In the near term, the existence of oil stored outside the Gulf, including in offshore tankers that sailed before the strikes, provides a buffer similar to that used after the 2019 attack on Saudi oil facilities, which helped prevent significant export losses at that time,” the agency says.

“We have scheduled imports for delivery up to end of April 2026 and, therefore, as it stands, we are assured of security of supply,” Mr Wandayi said in a statement on March 3.“We’re closely monitoring the fluid situation as it evolves whilst engaging with our G-G suppliers for contingency planning.”Kenya signed oil import contract with three Gulf oil companies —Saudi Aramco, Abu Dhabi National Oil Corporation (Adnoc), and Emirates National Oil Company (Enoc) — in April 2023 allowing for the importation of fuel on a 180-day credit period.

The deal was meant to arrest the free falling Kenyan shilling by ending the monthly payments of over $500 million that oil dealers needed to pay for fuel on the spot market.

However, there have been concerns that consumers are missing out on the relief anticipated from falling crude prices in the global market. The contract was renewed for a further two years from last December. A source privy to this deal said that under the G-to-G agreement oil prices can be renegotiated if circumstances change.“Since it is a G-to-G prices can be renegotiated if circumstances change. That is the essence of G-to-G price and even broader trade agreements,” the source said. “There cannot be a ceiling in such agreements nor there a floor price. It is not what is feasible on both sides. That is the essence of G-to-G.”Prof Samuel Nyandemo of the University of Nairobi’s School of Economics said the war, if prolonged, is likely to affect the EA economies because oil imports directly sustain agriculture and industries.“The Middle East markets are going to shrink thus affecting the supply chain in supply and demand sides. Air transport has already been affected greatly. Remember Iran is the largest buyer of Kenyan tea, coffee and meat.”This week, Tanzania’s President Samia Suluhu Hassan directed the Ministry of Energy to strengthen strategic fuel reserves, as global fuel prices have already risen 13 per cent, with analysts warning of potential $100-a-barrel crude if conflict persists.

For Uganda, the war was hurting something else: gold exports. Uganda’s gold export earnings doubled from almost $7 billion in the 12 months ending February 2026 from $3.5 billion the previous year, driven by growing appetite from the United Arab Emirates, Dubai City. Uganda sells almost all her refined gold to Dubai buyers, according to Irene Bateebe, Permanent Secretary Ministry of Energy and Mineral Development.“The immediate wisdom, therefore, would be to strengthen this programme by taking advantage of the season for benefit.”The war, however, was threatening the stability of the wider region. In a statement on Saturday, the African Union called for "restraint, urgent de-escalation and sustained dialogue."

“The conflict has serious implications for energy markets, food security and economic resilience,” AU chairman Mahamoud Ali Youssouf said.