Strait of Hormuz Closure

The US–Iran conflict and the closure of the Strait of Hormuz in the first half of 2026 opened up the question of how African economies can hardwire more resilience against the impacts of shipping and energy shocks on African trade systems. What lessons can be drawn to insulate trade and consumers from the next energy and shipping crisis? Drawing on evidence from across the continent—from continental initiatives such as the African Continental Free Trade Area (AfCFTA) to sub-Saharan trade flows and East and Southern African ports—this article identifies four opportunities to build that resilience. 

To start with the obvious, increased shipping costs have a direct impact on trade costs. Risk coverage has been changing daily, becoming more restrictive and more expensive. Longer routes, higher cargo insurance, war risk surcharges, and delays impose greater working capital requirements, which are ultimately passed to African importers and exporters. For example, some shippers are imposing war risk fees of up to USD 4,000 per container, and freight fees have risen. Even on routes not directly affected by recent events, we are seeing rates increase: last month, the East African reported that some shipping companies were increasing certain rates for shipping to East African ports by up to 80%. As critical components of total export and import costs, these increases will mitigate some of the trade cost reductions that we have seen over the last 5 years. 

The closure of the Strait has also led to the continent facing compound shocks of higher energy and fertilizer prices and lower trade margins. The World Bank has estimated the price surge arising from the crisis to hit 24% on average for energy, while fertilizer prices were projected to increase by 31%, driven by increases in urea costs. These then pass through to inflation increases and hits growth. Sub-Saharan Africa’s GDP growth forecasts for 2026 have already been scaled down to 4.1% from 4.5%. The challenge is also cumulative—The Economist has described this as the third crisis to hit African states in the past 6 years. 

But these stresses also highlight the opportunities for the continent to build more future-proof systems. The first lies in oil trading: two thirds of Africa’s crude oil is exported externally, while the continent imports 61% of its refined oil needs. While demand for refined oil grew by over 300% between 2000 and 2023, Africa’s refining capacity declined by 20% over the same period, to constitute only 2% of global refined oil output. But this is starting to change: over the past 3 years, major oil refining states have seen their petroleum exports grow substantially. West Africa is instructive in showing how regional sourcing, refining, storage, and pipeline networks can support supply resilience. The expanding refining capacity of the Dangote factory—the world’s largest single oil refinery—adds to the optimism. Under the AfCFTA, smoother standards, finance, storage, and corridor links could help diversify African energy supply, while giving consumers a buffer against imported price spikes and traders greater certainty on supply and delivery times. 

The second opportunity lies in diversifying trade corridors, which is becoming strategically important given what are becoming recurring risks along traditionally preferred sea routes through the Red Sea and Persian Gulf. In the short run, the conflict has created windfalls from increased traffic through ports on the eastern and southern seaboards of Africa: Cape Town in South Africa has seen a 112% increase in vehicle traffic in recent months, while Kenya’s Lamu port has become an important transshipment hub in the region and seen its throughput rise by 900%. If managed well, this can also translate into longer-term benefits. For countries like South Africa, Kenya, Mozambique, and Tanzania, the shift is bringing into play the viability of port upgrades that would improve performance and increase carrying capacity—energizing competition and creating more options for the continent’s exporters. 

Thirdly, the viability of intra-African regional trade is not constrained by tariffs. While it stands at only 14% of Africa’s total trade (compared to 58% for intra-EU trade), over 90% of tariff lines have already been negotiated away under the AfCFTA. What remains is to tackle non-tariff barriers. The UN estimates that eliminating these would generate gains of USD 20 billion per year for AfCFTA member states, three to four times more than the gains expected from eliminating intra-African tariffs. This involves governments, regional bodies and supporting agencies targeting procedural delays, sanitary and phytosanitary requirements, and customs inefficiencies, while reducing the complexity of rules of origin. The AfCFTA, for example, is already putting in place an electronic certificate of origin and driving up its utilization with the support of TradeMark Africa. 

The fourth opportunity, albeit demonstrated in adversity, lies in sub-Saharan Africa’s rapidly growing trade links with the Middle East. Between 2020 and 2023, sub-Saharan exports to the Middle East and North Africa grew by 50% from USD 15 to USD 22 billion, reflecting in particular the sharp growth of Gulf markets for African exports in food, livestock products, horticulture, tea, coffee, minerals, and services. This expansion has been driven by growing investment, logistics links, and preferential trade arrangements. African governments and traders should therefore deepen partnerships with major Gulf logistics operators. Such partnerships can strengthen supply chain security through access to secure terminals, advanced cargo tracking, risk monitoring, and contingency routing during regional disruptions. 

The lesson is not that Africa can or should insulate itself from global chokepoints, but rather that it has opportunities to diversify its trade partnerships, build resilience, and take advantage of new opportunities. Trade facilitation can reduce the domestic amplification of external shocks. When fuel prices rise, every avoidable delay at the border becomes more expensive. When freight rates are volatile, every manual document check, non-tariff barrier imposed, weighbridge stop, or unpredictable inspection adds risk premium. The trade facilitation agenda—improving ports and corridors’ efficiency, digitizing trade processes, building one-stop border posts, tracking and reducing non-tariff barriers, strengthening standards systems, and promoting export readiness—therefore becomes an energy-shock resilience agenda. The faster that goods move along transport corridors and through trade nodes, the higher the margins, and crucially, the greater the competitiveness the continent has with other trade channels. 

By building more efficient, connected, and adaptive trade systems, Africa is better positioned to sustain exports and preserve market access during disruptions. Over the past 15 years, TradeMark Africa has worked with partners across the continent to support this goal by reducing the time and cost of moving goods and services along corridors and across borders, contributing to higher trade volumes and export values. This also helps to grow government revenues and to attract more investment. The Strait of Hormuz will not be the last chokepoint to close. Whether the next crisis finds African trade exposed or prepared depends on the policy choices being made now—and this one has shown that the virtuous cycle of faster, cheaper, more diversified trade is within reach.

David Beer is CEO, TradeMark Africa.

The views expressed in this article are those of the author(s) and do not necessarily reflect those of IISD.