War in the Gulf: How Iran’s Retaliation Threatens Kenya’s Economy and Security

Qatar, March 2 – The Middle East plunged into a new and dangerous chapter Saturday as the United States and Israel launched coordinated military strikes against Iran, triggering waves of retaliatory missile attacks across the region and bringing global aviation to a standstill. But for Kenya, thousands of kilometres from the frontlines, the shockwaves are arriving with alarming speed and with both economic and security implication.

Explosions rocked the Iranian capital Tehran, with satellite imagery revealing extensive damage at the secure compound of Supreme Leader Ayatollah Ali Khamenei. Iranian state media confirmed Saturday evening the killing of the 86-year-old cleric who had held absolute power for 36 years, plunging the Islamic Republic into an uncertain succession crisis.

Under Article 111 of Iran’s constitution, a three-member interim Leadership Council has been formed to assume the supreme leader’s duties until the Assembly of Experts selects a permanent successor. The council comprises 67-year-old cleric Alireza Arafi, a jurist from the Guardian Council appointed by the Expediency Discernment Council; reformist President Masoud Pezeshkian; and hardline Judiciary Chief Gholamhossein Mohseni-Eje’i . This unprecedented arrangement splits Khamenei’s vast powers among the three men, marking the first time since the 1979 revolution that Iran has operated without a single supreme leader.

Tehran acted swiftly on its promise to hit back. The Islamic Revolutionary Guard Corps announced that its missiles and drones had targeted the headquarters of the U.S. Navy’s Fifth Fleet in Bahrain, as well as American bases in Qatar and the United Arab Emirates. The Emirati defense ministry confirmed that one person was killed in Abu Dhabi from falling missile debris that landed in a residential neighborhood. Further explosions were reported across Gulf nations, including the UAE, Bahrain, Qatar, Kuwait, and the broader region.

For Kenyan motorists and businesses, the most immediate consequence of this escalating conflict will be felt at the petrol pump. Oil prices have already spiked as the strikes disrupted Gulf shipping routes, including the Strait of Hormuz, through which much of Africa’s imported fuel passes. The strait, a narrow waterway between Iran and Oman, handles about 21 million barrels of oil per day, roughly 20 percent of global consumption.

Shipping data now shows that major container vessels and oil tankers are turning back from the strait rather than risk transit. Hapag-Lloyd, a leading German international shipping and container transportation company, headquartered in Hamburg became the first major shipping line to formally announce the suspension of transits through the Strait of Hormuz, warning customers of delays, diversions, and schedule disruptions. The affected vessels include container ships operated by CMA CGM and Maersk, all of which have aborted their planned passages.

Kenya’s vulnerability to these disruptions is acute. The country relies almost entirely on imported refined petroleum, with the Middle East serving as the primary source. In March 2023, Kenya entered into a government-to-government deal with Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and Emirates National Oil Company (ENOC) to supply all monthly petroleum imports under a 180-day credit arrangement designed to ease dollar demand and stabilise the shilling at the time. In January, this arrangement was extended to early 2028, includes strategic plans by Saudi Aramco to transform the Mombasa petroleum refinery into a modern oil storage hub, deepening Gulf-state integration into Kenya’s energy infrastructure. That carefully negotiated arrangement – critical to Kenya’s foreign exchange stability and fuel security – now faces an uncertain future if the conflict widens and disrupts Gulf supply lines.

The African Union has warned that further escalation could worsen global instability, affect energy markets, threaten food security, and strain economic resilience – particularly in nations already facing conflict and economic pressures. Rising fuel costs will drive inflation in oil-dependent economies, and Kenya is no exception. Every shilling increase in global crude prices translates directly to higher transport costs, more expensive electricity, and inflated prices for basic goods.

Cabinet Secretary for Investments, Trade, and Industry Lee Kinyanjui publicly acknowledged the threat. “The ongoing conflict in the Middle East will have a direct impact on Kenya’s export basket,” he stated. “We enjoy thriving trade with Middle East countries, where supplies of meat, vegetables, coffee, tea and flowers top the list”.

The numbers tell a sobering story. Kenya and the UAE signed a landmark Comprehensive Economic Partnership Agreement on 14 January, the first such trade deal between the UAE and a mainland African country, positioning Kenya as a strategic gateway for trade with the Gulf region . The UAE is currently Kenya’s second-largest source of imports and its sixth-largest export destination. Kenya exports tea, meat, fruits, vegetables and flowers to the Gulf nation, while importing petroleum products, chemicals and machinery.

But trade with the region has already proven risky. The Kenya National Chamber of Commerce and Industry revealed in January that Kenyan traders lose approximately 6.78 billion shillings annually due to unpaid products and lost containers in the UAE market. “Per week, from the reports that we receive, we lose about 3 containers of fresh produce. That is a total of around 150 containers in a year,” explained KNCCI President Dr. Eric Rutto. “In terms of meat exports, approximately 20 to 25 percent are not paid; that is approximately 6 billion”. KNCCI formally opened its Dubai office, as part of a new trade solution aimed at addressing up to 90 percent of challenges faced by Kenyan exporters, according to KNCCI president Rutto.

The current conflict threatens to compound these losses exponentially. With Dubai International Airport, the world’s busiest for international passenger traffic, and Al Maktoum International both suspending all operations indefinitely, the air freight corridors that carry Kenyan flowers and vegetables to Gulf markets have been severed. Kenya Airways has announced the temporary suspension of its flights to Dubai and Sharjah following the closure of United Arab Emirates airspace.

Kinyanjui acknowledged the government’s concerns while pointing to longer-term strategy. “In a world increasingly dependent on one another, disruption to trade and travel can have far-reaching consequences, even in faraway lands. While we hope for a speedy resumption to normalcy, the reality of geopolitics remains unpredictable,” he said. “It is for this reason that Kenya has actively pursued market diversification to cushion against overreliance on any one region. Market diversification creates resilience and sustainability”.

The government, he added, is consulting with critical stakeholders to ensure that Kenya’s trade position is not adversely affected and that alternative routes can be established to serve markets in the interim.

A delicate diplomatic balancing act

The conflict places Kenya in an extraordinarily difficult diplomatic position. On one hand, the United States remains a critical trade and security partner. Under the African Growth and Opportunity Act, Kenya enjoys duty-free access for thousands of products – a preferential window that supports over 66,000 direct jobs in the apparel sector alone.

On the other hand, Iran represents one of Kenya’s fastest-growing frontier markets. Kenyan exports to Tehran, primarily high-quality black tea, surged to 6.8 billion shillings in 2023 – a more than four-fold increase over five years. A high-level Kenyan delegation concluded a landmark visit to Tehran just two months ago, seeking to rejuvenate a historic trade relationship and expand cooperation into technology and agriculture.

President Donald Trump has now threatened to impose a 25 percent tariff on any nation trading with Iran, a move that would effectively neutralise Kenya’s AGOA benefits and force Nairobi to choose between a resurgent tea market and vital access to American consumers. The warning, posted on Trump’s Truth Social platform, arrives at a diplomatically sensitive moment for Kenya.

“The timing could not be more delicate,” a senior official from foreign affairs ministry involved in the trade talks, told the Standard newspaper, speaking on condition of anonymity because of his role in the trade discussion. “We are in the process of reactivating a major export market. This threat introduces a layer of risk that neither traders nor policymakers can ignore”.

The government now finds itself walking a geopolitical tightrope. “Our instructions are to continue implementing the agreed roadmap with Iran, but with heightened awareness,” the official added. “Ultimately, we are monitoring the US situation closely. We cannot afford to lose the American market, but we cannot ignore the potential of the East”.

Security fears as US bases in the crosshairs

Perhaps the most alarming dimension of this conflict for Kenya is the security threat lurking much closer to home. The United States maintains two significant military installations in the region that could become targets in a wider confrontation.

Camp Lemonnier in Djibouti is the only permanent U.S. military base in Africa, hosting approximately 4,000 personnel and serving as the headquarters for Combined Joint Task Force-Horn of Africa. The base is a critical hub for counterterrorism operations across the continent, including drone operations in Somalia and Yemen.

On Kenyan soil, the Manda Bay airfield in Lamu County is currently undergoing a 71 million dollar runway expansion project funded by the U.S. State Department. U.S. Africa Command’s General Dagvin Anderson, who attended the groundbreaking ceremony in January, described the project as an investment in joint security that “enhances the security for Kenya, but also enhances the security for all of us”. Kenya’s defense ministry called it a “pivotal strategic capability upgrade that significantly enhances operational reach, heavy airlift capacity, and forward logistical sustainment for joint and partner military operations”.

But the base has a painful history. In 2020, al-Shabab militants launched an attack on Manda Bay airfield, killing Army Specialist Henry Mayfield Jr., 23, and two Defense Department pilot contractors. The insurgents overran the site before an AFRICOM quick-reaction force based out of Djibouti could reinforce the base.

With Iran’s Supreme Leader now confirmed dead and the Islamic Revolutionary Guard Corps (IRGC) vowing, “the most fiercest offensive operations” against American and Israeli targets, the threat of proxy attacks has escalated dramatically. Iran’s network of allied militia groups across the region, including in Somalia and Yemen, may act independently or intensify efforts against U.S. forces and interests. The potential for al-Shabab, which has longstanding if informal ties to Iran-aligned networks, to exploit the chaos for its own purposes cannot be dismissed.

The conflict also raises the spectre of increased terror activities across East Africa. Iran’s Parliament National Security Commission Secretary, Dr. Bahram Saeidi, issued a chilling warning: “We have set fire to U.S. bases in seven countries, and that was only a warm-up.” The IRGC has announced that its missile and drone operations are ongoing, with further details to be announced.

For Kenya, which has suffered numerous terror attacks linked to al-Shabab, the risk is twofold. First, the conflict could energise radical elements within the region, providing propaganda opportunities and recruitment incentives. Second, security forces that would normally focus on counterterrorism may be stretched thin or redirected to address potential threats to U.S. facilities, creating gaps that militant groups could exploit.

The government has already activated its crisis response mechanisms. Foreign Affairs Principal Secretary Korir Sing’Oei stated that Kenya is “following with deep concern the evolving situation in the Middle East and are in close communication with our diplomatic Missions”. He urged Kenyans in the region to exercise caution and emphasised that Kenya supports diplomatic efforts aimed at easing tensions and restoring stability.

Kenyans in the crossfire as diaspora safety escalates

Perhaps the most human dimension of this crisis concerns the estimated 400,000 Kenyans living and working across the Middle East. The government has issued an urgent directive for all citizens in the region to immediately register with Kenyan diplomatic missions.

Diaspora Affairs Principal Secretary Roseline Njogu has activated the 24-hour Diaspora Emergency Hotline and urged those in distress to contact the nearest Kenyan Embassy or consulate immediately. “The State Department of Diaspora Affairs remains operational around the clock to support Kenyans abroad. The government of Kenya reaffirms its unwavering commitment to protecting the safety, rights, and welfare of all Kenyans abroad,” she stated.

Dubai, which has one of the largest Kenyan populations in the diaspora, has been hit hardest by the conflict. Iranian missiles reportedly damaged part of Dubai International Airport as well as a luxury hotel in Dubai overnight. So far, Kenya has not received any information about citizens who are casualties of the conflict, but with major airlines suspending flights and airspace closed, thousands of Kenyans may find themselves stranded far from home.

The situation remains fluid and dangerous. Iranian Foreign Minister Abbas Araghchi has promised that Iran’s army “will teach aggressors the lesson they deserve.” Global leaders, including UK Prime Minister Keir Starmer and French President Emmanuel Macron, have called for restraint and a negotiated solution.

International relations analysts warn that for Kenya, the coming weeks will present a high-stakes test of the government’s crisis management capabilities across multiple fronts: economic, diplomatic, and security. A nation that deliberately built its trade strategy on market diversification and its security architecture on strategic partnerships now confronts a conflict that threatens to undermine both pillars simultaneously – exposing the limits of diversification when the entire Gulf region becomes a war zone.