The US/Israel–Iran war is reshaping Africa’s trade landscape. What does this mean for investment?

On 28 February 2026, the United States and Israel launched a coordinated military offensive against Iran, initiating what has since been considered one of the most consequential geopolitical disruptions since the 1970s energy crisis. Within hours, Iran retaliated with missile and drone strikes across the Gulf and, essentially, enforced a de facto closure of the Strait of Hormuz, one of the world’s most important maritime chokepoints through which approximately 20% of global oil and liquefied natural gas transits every day. More than a month (of attacks and counterattacks) later, fears still abound about what more will come.

Even so, thousands of kilometers from the physical battlefield, the African continent is now bearing the economic brunt of neither a conflict it initiated nor controls. As noted by the Global Campus of Human Rights, it is ‘fast becoming a human rights crisis driven by inflation, food insecurity, disrupted trade, and heightened regional instability.’ Djibouti’s Finance Minister Ilyas M. Dawaleh warned that the conflict would ‘bring severe economic consequences for developing countries,’ with small states depending on maritime trade facing ‘deeper economic uncertainty as external shocks ripple across the region and Africa.’

Shipping and the architecture of the crisis

For starters, the Middle East, as already noted, is an important nexus for global trade, with essential maritime chokepoints, like the Strait of Hormuz and the Bab-el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden. The involvement of Iran-aligned Houthis in Yemen, who have launched more than 190 attacks on commercial shipping since October 2023, has created more disruption to these important global commerce arteries.

This means ships previously transiting the Suez Canal are now being diverted around the Cape of Good Hope, adding 10-14 days to journey times for Asia-Europe routes and increasing cargo travel distances by an average of 9%. The volume of trade passing through the Suez Canal has also plummeted by approximately 57.5% since hostilities intensified, with the number of ships crossing the canal declining by 66%. Transit through the Bab-el-Mandeb Strait has, similarly, decreased by more than 50%, while vessel traffic around the Cape of Good Hope has surged by 130%.

For Africa, a continent very much integrated into global supply chains, yet possessing significant untapped potential, these implications, one could say, are just as challenging as they could be perceived as enlightening. The crisis exposes structural vulnerabilities while also shedding light on ways towards better economic sovereignty and regional integration.

The impacts on African trade

African trade’s structural design is, for the most part, tied to global shipping lanes, commodity markets, and the economic health of Middle Eastern partners. The closure of the Strait of Hormuz is therefore a structural shock to these connections. According to the World Economic Forum, the war’s tumbling economic fallout is ‘reshaping global commodity markets, food systems, industrial supply chains, financial conditions, and geopolitical alignments, and potentially so, for the coming years.

The disruption of shipping through the Strait has greatly increased maritime freight costs for vessels rerouting around the Arabian Peninsula. Several African currencies, including the South African rand and the Egyptian pound, have depreciated against the US dollar in the weeks since hostilities commenced, increasing the cost of all import bills denominated in hard currency.

Egypt is perhaps one of those heavily affected African economies. A net oil importer that also depends on Israeli natural gas for roughly a fifth of its gas supply, Egypt has seen Israeli gas fields shut down since the outbreak of the war. Cairo has described its economy as being in a ‘state of near-emergency,’ as foreign portfolio investors pulled an estimated US$6 billion from Egyptian markets, the pound depreciated, and Suez Canal revenues came under threat.

North African states more generally face fiscal pressure, with analysts warning that sustained price shocks could reignite social unrest reminiscent of the 2011 uprisings. For sub-Saharan Africa, the impact is equally severe, if structurally different. Rising oil prices mean higher transport costs for landlocked countries, higher food prices across urban and rural markets, and tightening of already stretched government budgets. Interest rate cuts that were anticipated across several African central banks in 2026 are being deferred indefinitely amid inflationary pressures.

The burden of oil prices and the aviation sector

Global oil prices surged by more than 25% in the first week of the conflict alone, with some analysts projecting Brent crude could breach US$130 per barrel in a tail-risk scenario involving sustained damage to Gulf energy infrastructure. According to Allianz Research, the oil production of Kuwait, Iraq, Saudi Arabia, and the UAE collectively dropped by an estimated 6.7 million barrels per day within the first fortnight, as Iranian drone attacks targeted Gulf refineries.

For African net oil importers, which constitute the majority of the continent’s 54 nations, this means an acute fiscal shock. Higher fuel costs feed directly into transport, agriculture, and manufacturing, which then flow into the wider inflationary pressure that affects household purchasing power. In East African states, for instance, fuel price spikes directly threaten food security and livelihoods for large segments of the population already struggling to afford necessities.

There is, however, a countervailing dynamic for African hydrocarbon exporters. According to Chatham House, Algeria, Libya, and Nigeria stand to benefit from climbing oil prices through increased export revenues. Libya’s revenues have increased at its prevailing production rate of approximately 1.37 million barrels per day. In Nigeria, the Dangote Petroleum Refinery (Africa’s largest refinery by capacity), has begun exporting refined products, including jet fuel, to European buyers facing Middle Eastern supply disruptions.

Notably, the Dangote Refinery, as is pointed out, is emerging as an important asset in Africa’s response to global energy disruptions. AfCFTA experts have noted that it ‘can produce large volumes of refinery products locally and create the potential for African countries to trade fuel under the AfCFTA instead of relying on imports from other regions.’

In international aviation, the war has inflicted severe damage as well, with direct consequences for African connectivity. The closure of airspace over Bahrain, Iraq, Israel, Kuwait, Qatar, Syria, and the UAE, collectively handling approximately 15% of global air traffic, has forced airlines to reroute flights along significantly longer paths, increasing fuel consumption and journey times. Emirates and Qatar Airways, two of the most important aviation links between Africa and the rest of the world, even faced a near-total cessation of operations for the time being.

More than that, the price of jet fuel more than doubled in the weeks following the outbreak of hostilities, putting African carriers under acute financial pressure. IATA reported that while Africa posted the highest global aviation demand growth of 11.9% in early 2026, capacity grew even faster at 13.1%, squeezing load factors and airline margins at precisely the moment fuel costs were escalating. For aviation-dependent sectors, like tourism, fresh agricultural exports, and high-value logistics, the interruptions mean significant losses in revenue and competitiveness.

On the reliance on the Middle East (and Asia) commodities

The war further exposed the dangers of Africa’s dependence on the Middle East (and Asia to an extent) for refined petroleum products, fertilizers, and manufactured imports. Close to half of African countries rely on oil, gas, or minerals for at least 60% of export earnings, as UNCTAD has noted, making their fiscal positions highly sensitive to commodity price cycles they do not control.

Fertilizer markets have been particularly disrupted as approximately one-third of the global fertilizer trade normally passes through the Strait of Hormuz. The disruption to this corridor is driving up fertilizer prices globally, threatening African agricultural output and food security, especially when crop cycles are particularly becoming sensitive to input availability. The Middle East Institute warns that knock-on effects on crop yields could extend through late 2026 and into early 2027 if disruptions continue.

The general currency impact heightens these pressures as the International Crisis Group has observed. States now have to race to secure the energy needs of their citizens while bracing for economic fallout, just the conditions that make currency risk a key variable requiring careful management for any investor operating in the region.

The latent opportunity

Paradoxically, the same crisis threatening African economies also presents a good case for accelerating intra-African economic integration. African oil exporters now have a rare window to capture market share freed by Gulf suppliers, supply African neighbors with refined products, and establish themselves as reliable, proximate energy partners. African Energy Week 2026 analysts have noted that even under adverse global trade conditions, intra-African energy trade is anticipated to increase, showing the latent potential of a continental energy market.

However, the lesson for Africa’s policymakers and private sector is that reliance on geographically distant, geopolitically volatile supply chains is not only commercially inefficient but also operationally vulnerable. The South Africa Trade Desk has urged African governments to identify opportunities within the crisis for actions that can help them meet their financing, economic, environmental, and social challenges over the medium term.

The AfCFTA opportunity

The African Continental Free Trade Area (AfCFTA), which has been operational since 2021 and covers a combined market of 1.4 billion people and US$3.4 trillion in GDP, comes out of this crisis as not only a germane mechanism but also as a serious strategic necessity. Intra-African trade currently accounts for only 15% of the continent’s total trade, compared to 60% in Asia and 70% in Europe. The current war is, therefore, an accelerant for reversing that trajectory.

AfCFTA offers the institutional framework through which Africa could respond conclusively to the vulnerabilities that the Iran war has exposed. Reducing tariffs, harmonizing regulations, and facilitating cross-border investment means the agreement creates the conditions for African energy producers to supply African consumers and for African manufacturers to develop other relevant continental value chains, like pharmaceuticals, agro-processing, and light industry.

The ISS African Futures modeling platform projects that full AfCFTA implementation could drive Africa’s economic growth rate several percentage points above the current trajectory and evident indicators of this change are already emerging. Nigeria’s Ministry of Industry, Trade and Investment reported intra-African trade of approximately US$3.1 billion in the first half of 2025, attributing the increase partly to AfCFTA tariff concessions.

Namibia, on the other hand, launched its first AfCFTA shipment, 25,000 tons of salt to Nigeria, marking a landmark practical operationalization of the agreement. The GIS Reports analysis notes that the agreement is now seen by African states as a shield against external shocks but also as a means for opening up the continent’s full economic potential. World Bank projections also suggest that full AfCFTA implementation could raise Africa’s exports by 32% by 2035, increase intra-African exports by 109% led by manufactured goods, and uplift at least 30 million Africans out of dire poverty: the kind of resilience that Africa must build to withstand the next geopolitical shock, whatever form it takes.

Yet there are a few challenges to AfCFTA implementation, including inadequate infrastructure, uneven institutional capacity, and persistent non-tariff barriers. However, the geopolitical context has materially changed the political will calculus. According to UNCTAD’s 2024 Economic Development in Africa Report, while full implementation of the AfCFTA could potentially create a US$3.4 trillion market, unlocking this potential needs investing in infrastructure, streamlining trade policies, and supporting industrialization through incentive tax breaks and affordable capital.

The role of AMENA AFRICA in navigating this new landscape

The complex nature of the investment environment, as described: currency volatility, changing commodity dynamics, disrupted supply chains, and changing regulatory frameworks, points to the fact that investing in Africa has never required more expert, on-the-ground guidance than it does today. But then again, that opportunity has, perhaps, not quite convincingly presented itself before

As a specialized advisory firm with rich expertise in African market entry, trade facilitation, and investment strategy, AMENA AFRICA suitably fills that gap. We enable businesses to navigate Africa’s opportunities with confidence, regardless of the geopolitical headwinds at any given time. Our teams also connect one with on-the-ground partners needed to operationalize market entry efficiently and compliantly, and further provide support thereafter.

In the context of the current crisis, we offer businesses several important capabilities. For instance, our market entry and market research services provide granular, country-level intelligence needed to identify which African markets are best positioned to benefit from issues, like energy disruption, and which are most exposed to risks.

We also help identify relevant sectors, be it energy, agro-processing, logistics, or manufacturing, where AfCFTA’s implementation presents viable competitive advantages, and to navigate Africa’s dynamic industries (like air connectivity), as regional routes and logistics chains are restructured in response to the Middle East disruptions.

Simply said, at AMENA, we believe that Africa’s economic potential is structural and not cyclical. Conflicts and geopolitical tensions cease, and commodity cycles turn, but the continent’s economic trajectory, resource wealth, a growing youthful middle-class, and the potential of AfCFTA provide an investment thesis that outlives any crises.

So, if you seek to navigate today’s risks while positioning yourself for tomorrow’s opportunities continentwide, we definitely could be your right-hand partner on the ground; to help you confidently explore and invest.