By Benadeta Mwaura - Reporter
Kenya, 17 April 2026 - Global oil markets shifted dramatically on Friday, with prices tumbling below $90 per barrel following the full reopening of the Strait of Hormuz, a key global shipping route that had been at the centre of the Iran war.
Brent crude dropped sharply by as much as 9–11% to about $88–$90 per barrel, marking one of the steepest single-day declines since the conflict began.
The drop followed confirmation by Iran’s foreign minister that the Strait of Hormuz was “completely open” for commercial vessels during the ongoing ceasefire.
The decline represents a significant reversal from late March highs, when oil prices had surged toward $120 per barrel amid fears of prolonged supply disruptions.
The reopening of the Strait through which roughly 20 percent of global oil supply passes has immediately eased fears of supply shortages that had driven prices sharply upward in recent weeks.
The price drop was further supported by renewed prospects of diplomatic talks between the United States and Iran, alongside a temporary ceasefire in the region, signalling a possible de-escalation of the conflict.
Markets reacted instantly. Global stocks rallied, bond yields fell, and currencies adjusted as investors priced in lower energy costs and reduced geopolitical risk.
The timing of this global shift is particularly striking for Kenya.
Just a day earlier, the Energy and Petroleum Regulatory Authority (EPRA) had implemented one of the sharpest fuel price increases in recent history, raising petrol by KSh28.69 per litre and diesel by KSh40.30, pushing pump prices in Nairobi above KSh206 per litre.
Hours later, President William Ruto assented to amendments lowering VAT on fuel to 8 percent, a move framed as a cushioning measure but one that only partially offset the increases.
Now, with global oil prices dropping below $90 per barrel, the contrast becomes difficult to ignore.
The very global pressures that were cited as justification for the price hike are already easing.
To be clear, Kenya’s pricing model operates on a lag system, meaning current pump prices reflect fuel procured weeks earlier when global prices were significantly higher.
But this is precisely where the debate deepens.
If oil has already fallen by over $10 per barrel in a single day, and if the Strait of Hormuz is now open, the question shifts from why prices went up to how long they will remain high.
Because what Kenyans are experiencing today is not just a reflection of global markets.
At its peak, the conflict disrupted millions of barrels per day and triggered what analysts described as one of the largest supply shocks in modern history.
Now, with prices falling just as sharply as they rose, the market is sending a different signal: volatility is no longer the exception, it is the norm.
For Kenya, that creates a difficult balancing act.
Raise prices too late, and the shock hits consumers all at once.
Maintain high prices too long, and the public begins to question the link between global markets and domestic policy.
The drop to around $90 per barrel does not necessarily signal the end of the crisis. Analysts warn that while the Strait of Hormuz is open, a U.S.-led military presence remains in the region, and long-term stability is far from guaranteed.
But it does change the conversation.
Because within 48 hours, the narrative has shifted:
From scarcity to supply.
From panic to possibility.
From $120 fears to sub-$90 reality.
And in Kenya, where consumers are already paying over KSh200 per litre, that shift raises a pressing question:
If global prices can fall this fast, how long should domestic prices take to respond?
More from Kenya
Earlier, Kenya had formally requested emergency financial support from the World Bank to cushion its economy against the growing shocks triggered by the ongoing Iran conflict, in what signals the scale of pressure building within the country’s energy-dependent economy.
The request was confirmed by Kenya Central Bank Governor Kamau Thugge, who spoke to Reuters, on 16 April 2026, during the IMF–World Bank Spring Meetings in Washington, where global policymakers were grappling with the economic fallout of rising oil prices and supply disruptions.
Thugge described the request as “significant,” though he did not disclose the exact amount, noting that Kenya is seeking rapid-disbursing funds designed to help countries respond quickly to economic shocks.
The move places Kenya among a growing number of economies turning to multilateral lenders as the Iran war disrupts global energy markets, pushing oil prices higher and threatening inflation across import-dependent nations.
Kenya’s appeal for support underscores its structural exposure to global oil markets, given that the country imports all its petroleum needs.
As the conflict continues to disrupt supply routes, particularly around the Strait of Hormuz, the cost of fuel has surged globally, with direct implications for domestic prices.
The Central Bank warned that the country is already facing rising costs of essential commodities, including petrol, alongside broader inflationary risks.
This comes at a time when Kenya has already experienced one of the sharpest fuel price increases in recent years, with pump prices crossing the KSh200 mark following the latest review by the Energy and Petroleum Regulatory Authority (EPRA).
The fuel crisis has also triggered knock-on effects across the economy, from increased transport costs to rising food prices, compounding pressure on households and businesses.
The World Bank support being sought is expected to complement ongoing budgetary assistance discussions between Kenya and the lender, including development policy operations that were already under negotiation before the conflict escalated.
Rapid response financing, as described by the World Bank, typically allows countries to access funds quickly during crises, helping stabilise economies facing sudden shocks such as commodity price spikes or supply disruptions.
Globally, the World Bank has indicated it could mobilise up to $80 billion to $100 billion in support for countries affected by the war, reflecting the scale of the crisis unfolding across energy markets.
Despite the mounting pressure, the Central Bank maintains that Kenya’s macroeconomic fundamentals remain relatively stable.
Thugge noted that the Kenyan shilling experienced some depreciation at the peak of the conflict but has since recovered, supported by strong foreign exchange reserves, which currently stand above $13 billion, equivalent to nearly six months of import cover.
He added that while further pressure on the currency is possible if global conditions worsen, any depreciation would be “orderly,” with the Central Bank prepared to intervene to prevent excessive volatility.
In addition, the bank is exploring diversification of reserves, including potential gold purchases, as part of broader efforts to strengthen financial resilience.
Kenya’s request reflects a broader trend across developing economies, particularly in Africa, where rising energy costs and reduced external financing are forcing governments to seek emergency support.
The International Monetary Fund has already warned that more than a dozen countries could require financial assistance due to the energy shock, with global growth forecasts revised downward as inflation pressures intensify.
Analysts note that for energy-importing countries like Kenya, the combination of high oil prices, currency pressure, and rising domestic costs presents a complex policy challenge, balancing inflation control with economic growth.
The decision to seek World Bank support marks a critical moment for Kenya’s economic management, highlighting the limits of domestic interventions in the face of global shocks.
While the government has already introduced measures such as temporary fuel tax adjustments and subsidies to cushion consumers, the scale of the current crisis suggests that external financing may be necessary to stabilise the economy.
At its core, the request signals a recognition that the ongoing fuel crisis is not just a pricing issue, but a broader macroeconomic challenge, one that could shape Kenya’s fiscal and monetary policy direction in the months ahead.