The blockade of Strait of Hormuz has redrawn Kenya’s fuel supply map after Saudi Arabia overtook the United Arab Emirates (UAE) as the country’s largest source of petroleum imports with the help of pipelines bypassing the Strait of Hormuz.

Saudi Arabia unlike the UAE has managed to ship huge volumes of oil using pipelines without crossing the Strait of Hormuz, which Iran shut following the war.

Kenya imported Sh99.78 billion worth of goods from Saudi Arabia between March and May, more than double the Sh42.10 billion shipped from the UAE during the same period, Kenya National Bureau of Statistics (KNBS) data shows.

In the same period last year, the UAE was top with shipments worth Sh96.1 billion compared with Saudi Arabia’s Sh11.17 billion, reflecting the shift that rode on the back of bypassing the Strait of Hormuz via pipelines.

Saudi Arabia diverted a sizeable portion of the 20 million-plus barrels a day of crude that previously transited Hormuz by maxing out existing pipelines after Iran blocked the vital artery that carries a fifth of global oil.

The diversion made Saudi Arabia’s state-backed oil company, Aramco, the top supplier of fuel to Kenya in the middle of the Iran war, which started on February 28.

KNBS data shows Saudi imports jumped a staggering 793.4 percent from Sh11.17 billion in the March-May period, with fuel being the bulk of the cargo.

Saudi Arabia’s East-West pipeline to the Red Sea was built in the early 1980s and has become crucial since the start of the Iran war and the resulting halt to shipping through the Strait of Hormuz.

The pipeline, built during the Iran-Iraq War, can transport up to seven million barrels daily, giving Saudi Arabia a major advantage with the closure of Hormuz.

Kenya imports nearly all of its fuel products from the Middle East via government-to-government (G-to-G) deals with Gulf suppliers, including Saudi Aramco, Abu Dhabi's ADNOC, and Emirates National ⁠Oil Company (ENOC).

The UAE, the only other Gulf state with meaningful Hormuz-bypass capacity, has completed half of a new West-East pipeline that will double crude capacity to Fujairah when it becomes operational next year. Its existing Abu Dhabi pipeline carries up ⁠to 1.8 million bpd.

Saudi Aramco said its ability to rely on the pipeline, storage facilities and export terminals allowed it to maintain business continuity despite unprecedented disruption through the strategic waterway.

Saudi Aramco President and CEO Amin Nasser said the company’s decades-long investment in strategic infrastructure enabled it to continue serving customers despite the disruption affecting commercial shipping in the region.

“We continued to demonstrate our ability to maintain business continuity by capitalising on our diverse asset base and multi-decade planning, including strategic infrastructure such as the East-West Pipeline, storage capacity, and export terminals,” Mr Nasser was quoted as saying by Gulf media outlets on Tuesday.

He made the remarks after the Saudi state-owned oil giant reported a 33 percent rise in second-quarter adjusted net income to $33.4 billion (about Sh4.32 trillion), explaining that higher energy prices during the conflict have lifted earnings while its infrastructure cushioned export disruptions.

The infrastructure advantage turned Saudi Aramco into the biggest beneficiary of Kenya’s G-to-G fuel import programme after the war, shifting the balance away from ADNOC and ENOC.

Before the conflict, the UAE’s ADNOC and ENOC had been major suppliers to Kenya under the G-to-G arrangement, with fuel deliveries largely sourced through Gulf export terminals.

The agreement, signed in March 2023, allows Kenya to import petrol, diesel and jet fuel from Saudi Aramco, ADNOC and ENOC on 180-day credit terms.

Saudi Arabia’s East-West Pipeline provided a direct advantage by allowing Aramco to continue supplying international customers while reducing dependence on the vulnerable shipping corridor.

The UAE’s smaller pipeline that carries fuel to the Port of Fujairah outside Hormuz has curtailed its ability to match Saudi Arabia’s export flexibility during periods of disruption.

This is largely because Saudi Arabia has direct coastlines on both the Persian Gulf and the Red Sea, giving it a physical overland bridge that the UAE lacks on a similar scale. The biggest portion of the UAE’s shipping infrastructure, trade networks, and export terminals rely on routes through the Strait of Hormuz.

Kenya’s import data shows how quickly the shift occurred, with the UAE maintaining a firm lead over Saudi Arabia before the war.

Kenya imported Sh22.99 billion worth of goods from the Emirates in January and Sh30.75 billion in February, compared with Sh13.50 billion and Sh11.35 billion from Saudi Arabia.

The trend reversed after the conflict began, with Saudi Arabia overtaking the UAE in March and widening the gap each month through May.

Saudi exports to Kenya rose to Sh24.60 billion in March, Sh31.50 billion in April and Sh43.69 billion in May, according to KNBS figures.

Meanwhile, UAE exports fell from Sh19.15 billion in March to Sh15.97 billion in April before dropping steeply to Sh6.98 billion in May.

The three-month reversal transformed the rankings, after Kenya imported Sh124.63 billion worth of goods from Saudi Arabia compared with Sh95.83 billion from the UAE by May.

KNBS data shows Saudi imports jumped a staggering 793.4 percent from Sh11.17 billion in the March-May period last year to Sh99.78 billion this year.

Over the same period, imports from the UAE declined 56.2 percent from Sh96.12 billion to Sh42.10 billion, highlighting the scale of the supply chain shift.

This means Saudi Arabia supplied more than twice the value of imports shipped from the UAE during the conflict, overturning a long-established trade pattern in which the Emirates overwhelmingly dominated Kenya’s petroleum supplies.

Petroleum products account for more than three-quarters of Kenya’s imports from Saudi Arabia, with fertilisers and plastics making up much of the remainder.

Kenya’s imports from the UAE are also dominated by refined fuels, alongside industrial goods such as plastics, copper and aluminium.

Energy Cabinet Secretary Opiyo Wandayi said the G-to-G agreement does not restrict where the three companies source petroleum products, provided they meet Kenya’s standards.

“There is nothing in the agreement that we signed as a country and the three international oil companies from sourcing oil products from any part of the world,” Mr Wandayi said.

The shift in supply coincided with a sharp rise in Kenya’s fuel bill. Spending on fuel and lubricants increased 46.02 percent to Sh334.24 billion in the first five months, according to the KNBS data.

Petroleum imports alone reached a record Sh122.35 billion in May, overtaking industrial supplies as Kenya’s largest monthly import category for the first time in recent history, going back many years.

The increase came as Kenya’s petroleum sector faced renewed scrutiny following the resignation of three senior energy officials over allegations involving fuel stock data and procurement.

Principal Secretary for Petroleum Mohamed Liban, Kenya Pipeline Company Managing Director Joe Sang and Energy and Petroleum Regulatory Authority Director-General Daniel Kiptoo Bargoria stepped down after being implicated in investigations into the management of petroleum supplies.

→ cmunda@ke.nationmedia.com

Follow our WhatsApp channel for the latest business and markets updates.