Strait of Hormuz crisis: Why fuel prices in Kenya could rise as global oil stocks plunge

Kenyan motorists and businesses could soon face higher fuel prices if global oil supplies continue to dwindle due to unrest around the Strait of Hormuz, according to a recent report on oil markets. The latest figures reveal a sharp decline in global oil stocks, with volumes falling by 69 million barrels in July alone, and a cumulative drop of 410 million barrels since the onset of the conflict.

Kenya, which imports all its petroleum products, stands to be directly affected as international petroleum prices and refined product costs are directly linked to local pump prices.

The report highlights that global oil supply, which increased by 2.4 million barrels per day in July to 101.5 million barrels per day, is still 6.3 million barrels per day below pre-pandemic levels. More alarmingly, 8.3 million barrels per day of Gulf production remains offline, with regional exports falling by 2.1 million barrels per day to 15 million barrels per day following the closure of the Strait of Hormuz in early July.

This disruption has also led to a record-high Atlantic Basin refining margin and a significant drop in global refinery crude throughputs, further exacerbating the situation.

The Energy and Petroleum Regulatory Authority (EPRA) states that Kenya's fuel prices are influenced by international petroleum prices, the exchange rate, and other costs. With total observed oil stocks at their lowest since April 2025, the market becomes increasingly vulnerable to further disruptions. Cumulative stock draws since February have reached 410 million barrels, leaving the market more sensitive to additional shocks.

Global oil supply is expected to decline by an average of 4.3 million barrels per day in 2026, while global oil demand is projected to decrease by 1.6 million barrels per day due to high fuel prices and supply disruptions.

If the Strait of Hormuz remains disrupted and global inventories continue to fall, Kenyan households and businesses could face higher fuel costs, affecting road transport, agriculture, construction, manufacturing, and logistics. The impact could eventually extend to increased transport fares and more expensive commodities if elevated fuel prices persist.