For Kenya, where fuel costs influence virtually every sector of the economy, the implications could be significant. An attendant fuels a vehicle at a petrol station along Mombasa Road, Nairobi on May 26 /LEAH MUKANGAi An attendant fuels a vehicle at a petrol station along Mombasa Road, Nairobi on May 26 /LEAH MUKANGAi The peace agreement between the United States and Iran to end a conflict that has disrupted global oil supplies since March has been welcomed by governments, businesses and consumers worldwide.
China, UK and global institutions like UNCTAD and the World Bank welcomed the preliminary peace deal and expressed hope that the signing would proceed as scheduled. China's foreign ministry said: "We hope all parties to stick to the path of peace and solve issues through dialogue.
For Kenya, a country heavily dependent on imported petroleum products, the deal could offer much-needed relief after months of elevated fuel prices that have squeezed household budgets, raised business costs and weighed on economic activity. The conflict had triggered repeated disruptions and closures of the Strait of Hormuz, the narrow waterway through which about 20 per cent of the world's oil and liquefied natural gas passes.
The closure sent shockwaves through global energy markets, pushing crude oil prices above $100 per (Sh 13,.000) barrel at the height of the crisis and fueling inflation across many economies. Globally, financial markets reacted positively to news of the peace framework, with oil prices falling sharply amid expectations that shipping through the Strait of Hormuz will normalize in the coming weeks.
In their immediate three months outlook on Monday, analysts at Citi now expect Brent crude prices to average lower in the second half of the year as the agreement restores confidence in global energy supplies. For Kenya, where fuel costs influence virtually every sector of the economy, the implications could be significant.