TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers profound insights into Kenyan and global economic trends.

Following Israel's unexpected attack on Iran last week, financial markets and the aviation industry suffered as the confrontation between the two most powerful militaries in the Middle East intensified into a full-fledged conflict.

Israel struck Iran's fossil fuel industry on Saturday, June 14.

Iranian state television reported a fire at the South Pars gasfield, a day after Tel Aviv murdered several of its senior military leaders and nuclear experts and damaged some of its nuclear facilities.

According to Al Jazeera, Iran retaliated with a flurry of drone and ballistic missile attacks, some of which managed to breach Israeli defences and kill at least 24 people.

While investors are looking to gold as a haven, analysts are keeping an eye on oil prices.

Concerns that the Israeli-Iran conflict would spread to major oil and gas-producing regions of the globe are mounting as the two nations engage in deadly salvos.

Experts cautioned that a full-scale conflict may make matters even worse.

"Fuel prices have already jumped 25% in the last five weeks," geopolitical economist Aly-Khan Satchu told .

Even though Kenya is thousands of kilometres away from the Israel-Iran confrontation, local tea exporters and farmers are scratching their heads.

Iran is one of Kenya's biggest importers of tea and livestock products, and the crisis may scuttle talks to expand commerce between Nairobi and Tehran.

The war broke out soon after Iranian ambassador to Kenya, Ali Gholampour, and Kenya's Agriculture Cabinet Secretary, Mutahi Kagwe, discussed how to overcome current obstacles to enable increased commerce in tea and oil between the two nations.

The talks focused on how tea growers might profit from Iran's thriving tea market and the whole value tea chain.

This comes at a time when the industry is experiencing volatility due to low prices brought on by an excess of the commodity compared to dwindling demand in the world market.

Satchu noted that Kenyan tea farmers had yet to experience the effects of the conflict.

"Tea prices seem delayed to react," he said.

The 2025 Economic Survey published by the Kenya National Bureau of Statistics (KNBS) revealed that Kenya exported goods valued at KSh 6.82 billion in 2024, up from KSh 6.73 billion in 2023.

The Tea Board of Kenya disclosed that Iran was among the 96 export destinations for tea in 2024.

During the period under review, Nairobi exported 13 million kilogrammes of tea to Tehran worth KSh 4.26 billion.

As the Israeli-Iranian war escalated, Kenya's favoured Murban oil prices rose above KSh 9,000 per barrel.

At the same time, Brent crude reached $74.87 (KSh 9,600) a barrel, and US West Texas Intermediate hit $73.74 (KSh 9,700).

Kenya’s reliance on petroleum imports priced based on Murban crude oil is set to drive up fuel costs, as escalating tensions in the Iran-Israel conflict push global oil prices higher.

The Energy and Petroleum Regulatory Authority (EPRA) recently increased petrol prices in Kenya.

Source: TUKO.co.ke