From Tehran to Kampala: How the Iran Conflict Is Hitting Uganda’s Economy ‎ -

On February 28, 2026, the United States and Israel reportedly carried out military strikes against Iran, accusing Tehran of developing a nuclear weapons programme. In a dramatic turn of events, Iran’s Supreme Leader, Ali Khamenei, was reported killed in the attack. Within hours, tensions across the Middle East soared, and global markets began to shake.

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‎Washington described the strike as a preventive measure aimed at curbing nuclear proliferation. Tehran has consistently denied pursuing nuclear weapons, maintaining that its nuclear programme is strictly for civilian energy purposes. However, for Israel, Iran’s nuclear ambitions have long been perceived as an existential threat. The United States has also accused Iran of destabilizing the region for years. These tensions did not emerge overnight, but the latest strike has pushed them into dangerous territory.

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‎While missiles fell thousands of miles away, conversations in Kampala shifted almost immediately. By Monday morning, the focus was no longer just geopolitics. It was fuel prices.

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‎Uganda imports approximately 2.96 billion litres of fuel each year, with 95 percent transported through Kenya’s pipeline system. Despite the Uganda National Oil Company (UNOC) holding a 20.15 percent stake in the Kenya Pipeline Company, Uganda remains a price taker in a market it does not control. As global crude prices climbed toward $100 per barrel following the strike, the pressure was immediate. Taxi drivers, boda boda riders, and transporters were the first to feel it, and passengers inevitably share the burden.

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‎Fuel affects everything. The truck transporting matooke from Mbarara or onions from Bugisu factors higher pump prices into its costs. Those expenses eventually reach the market stall in Kampala. With domestic oil production from the Tilenga and Kingfisher projects still months away, Uganda remains vulnerable to global shocks, particularly when they originate from one of the world’s most sensitive energy corridors.

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‎Uganda’s position as Africa’s leading coffee exporter is also at risk. About 67 percent of its coffee goes to Europe, particularly Italy and Germany. Instability in Middle Eastern shipping routes, especially around the Strait of Hormuz, drives up global shipping insurance and freight costs.

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