Kenya is set to lose an estimated $340 million due to elevated oil prices since the start of the U.S.-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, according to new analysis by climate advocacy group 350.org on Friday.

The analysis showed that even in the case of a swift normalisation of the Strait of Hormuz and the region, higher oil prices would cost the Kenyan people and businesses over half a billion ($ 490 million-$520 million) by the end of the year.

The group said its analysis was based on oil and gas pricing scenarios in the International Monetary Fund’s April 2026 World Economic Outlook, Kenyan consumption data, and observed price averages since the start of the U.S.-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,” the group stated.

The group said Kenya, as a net oil importer with no domestic petroleum production, 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,” it added.

According to the group, 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,” Ruth Agala, Regional Organiser for 350 East Africa, said.

“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,” she added.

Citing the next round of negotiations on a United Nations Framework Convention on International Tax Cooperation in New York, 350.org said that the UN Tax Convention is an opportunity to correct an unjust global system where profits are increasingly concentrated among multinational corporations.

Clémence Dubois, Campaigns Director at 350.org, noted that every spike in fossil fuel prices acted 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,” Ms Dubois stated.

The climate group demanded strong, permanent taxes on extraordinary fossil fuel profits, particularly during periods of war, market disruption and energy price spikes.

It also called for stronger international tax rules that give countries, especially in the Global South, greater rights to tax multinational corporations, stressing the need for investment in renewable energy and climate adaptation.