Oil Prices Surge Past $100 as Iran Talks Collapse, Raising Kenya Fuel Risk

By Benadeta Mwaura - Reporter

Kenya, April 13, 2026 - Global oil prices have surged past the $100 per barrel mark, underscoring the fragility of energy markets amid escalating geopolitical tensions between the United States and Iran.

The rebound follows the collapse of high-stakes negotiations aimed at easing the conflict, reversing earlier market optimism and reigniting fears of prolonged supply disruptions.

Brent crude climbed above $102 per barrel, while U.S. West Texas Intermediate (WTI) rose past $103, as markets reacted sharply to the breakdown in diplomacy and renewed threats to shipping through the Strait of Hormuz, a critical route for global oil flows.

The latest price spike reflects growing concerns over supply constraints, particularly following signals from Washington on potential enforcement measures targeting Iranian oil exports.

Any disruption in the Gulf region could significantly tighten global supply, given that a large share of the world’s crude passes through the Hormuz corridor.

While markets had briefly stabilised during earlier ceasefire talks, the collapse of negotiations has reintroduced a risk premium into oil prices, with traders factoring in the likelihood of prolonged instability.

The rebound is already affecting financial markets, with investors shifting toward safe-haven assets and reassessing inflation expectations.

Sustained high energy costs are expected to complicate monetary policy decisions globally, forcing central banks to balance inflationary pressures against slowing economic growth.

This trend is particularly pronounced in emerging markets, where external shocks tend to transmit quickly into domestic inflation and currency pressures.

In Kenya, the impact of rising global oil prices has yet to fully reflect at the pump, but underlying indicators suggest mounting pressure.

The Energy and Petroleum Regulatory Authority (EPRA) maintained fuel prices unchanged for the March–April 2026 cycle, with petrol in Nairobi retailing at KSh178.28 per litre, diesel at KSh166.54, and kerosene at KSh152.78.

Regulators attributed the stability to the pricing cycle, noting that the reviewed cargoes were sourced earlier and had not yet captured the full impact of Middle East tensions.

However, data from the same review shows a steady rise in landed fuel costs, with diesel increasing by over 8 percent and kerosene by nearly 7 percent, signalling pressure building within the supply chain.

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Supply-side concerns are also emerging domestically. Industry reports indicate that up to 20 percent of independent fuel stations in Kenya have experienced shortages, linked to disruptions in global shipments.

The situation has been compounded by speculative behaviour in the market, including panic buying and hoarding by retailers and consumers anticipating price increases.

Industry players warn that if tensions persist, the country could face a broader supply crisis, given its heavy reliance on fuel imports from the Middle East.

The Kenyan government has attempted to cushion consumers through its government-to-government fuel import arrangement, which has helped stabilise pump prices in the short term.

President William Ruto has defended the framework as a buffer against global volatility, saying it has ensured supply security while limiting immediate price shocks.

However, analysts warn this approach may delay rather than eliminate the impact of rising global prices, raising concerns about sharper adjustments in future pricing cycles.

The macroeconomic implications are already emerging. The Central Bank of Kenya recently paused its rate-cutting cycle, citing concerns over second-round effects from rising global energy prices linked to the Iran conflict. It also allowed EPRA to review fuel prices.

This signals concern that higher fuel costs could feed into broader inflation, affecting transport, food prices, and the overall cost of living.

While Kenyan consumers have so far been insulated from the immediate effects of the global oil rally, the current stability appears increasingly fragile.

With global prices above $100 per barrel, rising landed costs, supply disruptions, and tightening monetary conditions all point toward eventual adjustments in domestic fuel prices.

Ultimately, the situation highlights a structural vulnerability—Kenya’s heavy dependence on imported fuel, leaving the economy exposed to geopolitical shocks beyond its control.