Kenya to lose $800m in fossil fuel spikes as oil majors post record profits

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New analysis by environmental campaign group, 350.org, shows that elevated oil prices have already imposed an estimated $340 million on Kenya since the start of the Iran war and will cost up to $800 million ($770 million – $810 million) in total by the end of the year in case of continued escalation.

Even in case of a swift normalisation of the Strait of Hormuz and the region – recent weeks have seen renewed escalation and recorded concurrent rising prices – higher oil prices would cost the Kenyan people and businesses over half a billion ($490 million – $520 million) by the end of the year.

350.org’s analysis is based on oil and gas pricing scenarios of the International Monetary Fund’s April 2026 World Economic Outlook, Kenyan consumption data and observed price averages since the start of the Iran war and Hormuz crisis.

350.org’s estimates do not yet account for wider knock-on effects, including rising fertiliser and food costs, lower economic output and employment, or rising inflation driven by fossil fuel price volatility. As a result, the true economic damage is likely to be significantly greater than the direct losses from higher oil and gas prices alone.

As a net oil importer with no domestic petroleum production, Kenya is acutely vulnerable to global fossil fuel price volatility, making direct shocks to its import bill a severe macroeconomic threat. Energy and transport inputs ripple across every sector of the Kenyan economy driving up food and agricultural costs (via fuel and fertiliser), logistics, and baseline retail inflation, while putting intense downward pressure on the Kenyan Shilling and national foreign exchange reserves. 

A projected direct loss of up to $800 million diverts critical capital away from public investment, widening the trade balance and placing an unsustainable cost-of-living strain on households. This dynamic starkly underscores the economic exposure of importing fossil fuels while global oil majors capture windfall profits, intensifying local calls from climate advocates and civil society for Kenya to accelerate its shift toward decentralised, domestic renewable energy to build long-term economic resilience

“While international oil corporations record windfall profits from geopolitical instability, nations like Kenya are forced to pay the price,” said Ruth Agala, Regional Organiser for 350 East Africa. “This projected $800 million loss isn’t just a statistical headline; it represents immediate, damaging pressure on household budgets, and vital public funds being drained from our national economy. It reinforces the urgent need to break our dependence on fossil fuels and rapidly scale up domestic, community-led renewable energy systems.”

This week, governments are convening in New York for the next round of negotiations on a United Nations Framework Convention on International Tax Cooperation, a once-in-a-generation opportunity to rewrite global tax rules so countries can raise more revenue from multinational corporations and invest in climate resilience, public services and a just transition away from fossil fuels.

350.org says that the UN Tax Convention is an opportunity to correct an unjust global system where profits are increasingly concentrated among multinational corporations, while the costs of climate breakdown fall disproportionately on households and countries least responsible for the crisis. 

Clémence Dubois, Campaigns Director at 350.org, said: “Every spike in fossil fuel prices acts as an unofficial tax on people: increasing the cost of transport, electricity and food, while governments spend billions responding to disasters and shielding households from high energy prices. Yet the companies driving both climate pollution and energy volatility continue to reap extraordinary financial rewards. It’s only fair that they contribute to the solutions.” 

350.org is calling for:

• Strong, permanent taxes on extraordinary fossil fuel profits, particularly during periods of war, market disruption and energy price spikes;
• Stronger international tax rules that give countries, especially in the Global South, greater rights to tax multinational corporations;
• Public revenues from fossil fuel profits to be invested in renewable energy, climate adaptation and a fast, fair transition away from fossil fuels.

As governments negotiate the future of international tax cooperation, 350.org says they face a clear choice: continue protecting extraordinary fossil fuel profits or ensure those responsible for the crisis help finance the transition to a safer, fairer and more resilient future.