Worry as Global Oil Prices Increase in the Last Week of March

International oil prices surged in the week ending on March 27, 2026 as the closure of the Strait of Hormuz disrupted crude shipments resulting into the increase in global oil prices.

The strait carries about 20% of the world’s oil exports, making it a critical supply route.

According to the Central Bank of Kenya’s Weekly Bulletin for 27 March 2026, Murban crude oil averaged USD 97.99 per barrel on March 26, up from USD 95.91 the previous week.

Traders reacted quickly to the supply uncertainty, driving prices higher.

Oil prices were on the rise in early March, climbing from USD 76.25 per barrel on March 5 to USD 92.13 per barrel on March 12.

Energy market analysts attribute the surge to heightened market volatility ahead of the Energy and Petroleum Regulatory Authority (EPRA) fuel rate review, which affects domestic pricing and trading decisions

“The Strait of Hormuz is vital for global energy security. Any prolonged closure increases market risk and pushes fuel prices higher,” said energy analyst James Okoth.

Impact on Kenya’s Economy

Kenya imports a significant share of refined petroleum products. Rising international prices could increase production and transport costs, adding pressure on inflation.

CBK noted that while the Kenya Shilling remained stable, currency stability alone cannot offset global price spikes.

Also Read: Chinese-Owned Tanker Sails Through Strait of Hormuz Amid Tensions

Money Market and Treasury Bills Reflect Caution

Financial markets showed cautious sentiment. Commercial banks held Ksh 9.6 billion in excess reserves, keeping the money market liquid.

Treasury bill auctions received bids below expectations, while bond yields, especially on Eurobonds, rose as international investors reacted to geopolitical risk.

Equities and Bond Market Trends

The Nairobi Securities Exchange indices dipped slightly, reflecting cautious investor behavior.

Equity turnover increased, and market capitalization saw modest gains from initial public offerings, but volatility remained high.

Bond turnover in the domestic secondary market declined, while yields on international Eurobonds rose, signaling investor concern about geopolitical uncertainty.

Also Read: Global Oil Prices Increase Ahead of EPRA Fuel Rate Review

Global Inflation and Currency Effects

The U.S. Dollar Index strengthened amid safe-haven demand, and global inflation concerns remained due to fluctuating oil prices.

Analysts warn that if the strait remains closed, Brent crude could approach USD 150 per barrel, affecting both energy markets and economic stability in oil-importing countries.

Policymakers and businesses in Kenya are now watching the situation closely.

Measures like fuel hedging, improving energy efficiency, and using strategic reserves could help mitigate the effects of higher international oil prices on the local economy.

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