Iran-Israel conflict poses fresh risks to Zimbabwe

LIVINGSTONE MARUFU AND SAMANTHA MADE

The recent breach of ceasefire agreements between Iran and Israel has heightened fears of a full-scale conflict in the Middle East, with global economic consequences that could hit fragile economies like Zimbabwe’s the hardest.

At the centre of these fears is the potential closure of the Strait of Hormuz—a narrow but strategically vital waterway between Iran and Oman—through which a significant share of the world’s oil and liquefied natural gas (LNG) flows.

The Strait of Hormuz handles roughly 30% of global traded oil and 20% of LNG exports, making it one of the most critical maritime corridors for global energy security. Any disruption to shipping through this chokepoint, already threatened by heightened military activity, could send global oil prices soaring, disrupt supply chains, and trigger widespread inflation.

For Zimbabwe, a net importer of fuel, the implications are stark. Analysts warn that the country’s already strained economy could face a new wave of inflation, soaring production costs, and a slowdown in growth.

Engineer Eddington Mazambani, Chief Executive Officer of the Zimbabwe Energy Regulatory Authority (ZERA), confirmed that fuel price hikes are inevitable should the conflict persist.

“Any disruptions in supply channels will obviously affect supply and, in turn, push prices upwards. We continue to monitor the situation and advise authorities accordingly so that we ensure security of supplies and minimum price impact,” Mazambani told Business Times.

Dr Prosper Chitambara, a leading economist, said Zimbabwe’s fragile economy is exposed to the worst effects of global energy disruptions, given its reliance on imported oil.

“This corridor is one of the most important in the world, handling over 20% of the world’s oil. Any blockade could cripple exports from key producers. That would create a massive global shock, driving energy prices higher, slowing supply chains, and hurting GDP growth worldwide,” Chitambara explained.

“For Zimbabwe, with our heavy reliance on imports and high oil tariffs, the ripple effects will be severe. Goods prices will shoot through the roof, eroding competitiveness and weakening aggregate demand,” he said.

Chitambara warned that a prolonged conflict could lead to a global recession, with small, vulnerable economies like Zimbabwe likely to suffer the most.

“Some scholars estimate global GDP could decline by 1% to 2% if this escalates, and for Zimbabwe, the economic toll could be devastating,” he added.

Victor Bhoroma, another respected economist, said the breach of ceasefire and rising tensions have already rattled energy markets. He explained that Zimbabwe, as a price-taker with no oil or gas production of its own, is extremely vulnerable to global price shocks.

“The Strait of Hormuz is critical, with over 25% of global LNG and 20% of oil exports from Saudi Arabia, Oman, Qatar, and the UAE passing through that corridor. The value of oil and LNG that flows through the Strait exceeds US$2 billion daily,” Bhoroma said.

“If the Strait is blocked or even partially disrupted, global energy supply chains will suffer, prices will spike, and countries like Zimbabwe will be on the receiving end. We get all our fuel through commodity brokers like Glencore, so any global shortages or price hikes are passed directly onto us,” he explained.

Bhoroma stressed that higher fuel prices would ripple through the entire Zimbabwean economy.

“When fuel prices rise, so do production costs across industries. Zimbabwe imports nearly US$1 billion worth of fuel annually, and when gas imports are factored in, the figures rise even higher. As a net importer, we are exposed,” he said.

“This will trigger imported inflation, raise the cost of living, and make our locally produced goods uncompetitive. It weakens consumption, slows economic growth, and undermines stability,” Bhoroma added.

Misheck Ugaro, Vice President of the Zimbabwe Economics Society, expressed hope that the situation can be contained through diplomatic efforts, but acknowledged the risk remains.

“Closing the Strait would lead to severe global inflationary pressures, with petroleum prices soaring. I don’t think it will happen, but the mere possibility of it has already disrupted markets. Ceasefire breaches complicate matters, but I expect intense diplomatic engagements to prevent a total blockade,” Ugaro said.

Economist Vince Musewe warned that Zimbabwe cannot escape the inflationary pressures driven by global oil price volatility, given its dependence on imported energy.

“We are hugely dependent on oil from that region. Any price hikes will filter directly into domestic inflation. Zimbabwe will not be spared,” Musewe said.

However, he noted that Zimbabwe could see some relief through rising gold prices, a common trend in times of global conflict.

“Gold prices firm during wars, so Zimbabwe could benefit in that area. But the gains from gold will likely be outweighed by the inflationary effects of higher oil prices,” Musewe added.

As hostilities in the Middle East escalate following the breach of ceasefire agreements, Zimbabwe finds itself dangerously exposed to global economic turbulence. The country’s dependence on imported fuel, its fragile recovery efforts, and the spectre of imported inflation leave little room for error.

For now, authorities and analysts alike are watching developments closely, hoping diplomacy prevails. But as global oil prices continue to rise, the cost for Zimbabwe—both literally and economically—may already be unavoidable.