By Business Insider Reporter
As tensions escalate between the United States, Israel, and Iran, global attention has largely focused on geopolitics and military strategy. But a more immediate and deeply felt consequence may emerge far from the battlefield – at the fuel pump, in food prices, and across fragile economies like Tanzania’s.
Oil prices have already surged past US$110 per barrel following delays in planned US strikes on Iran’s energy infrastructure. Now, analysts at Macquarie Group warn of a far more severe scenario: if the conflict drags on into June, crude oil prices could spike to an unprecedented US$200 per barrel.
“Oil prices could surge to a record US$200 per barrel if the war continues… and the Strait of Hormuz remains closed,” the global financial services powerhouse headquartered in Sydney, Australia, warned late this week.
For developing economies, this is not just a market shift – it is a looming economic shock.
From global conflict to local crisis
The warning signs are already visible. According to JPMorgan, the world is transitioning from a temporary disruption in oil flows to a deeper structural problem – rapid depletion of global oil inventories. March recorded one of the largest drawdowns in oil stocks on record, raising fears of sustained supply shortages.
For Tanzania, which relies heavily on imported petroleum products, such a spike would have immediate and far-reaching consequences. Latest Bank of Tanzania figures put the country’s 2025 oil import bill at US$ 2.3 billion
Higher oil prices translate directly into increased fuel costs, which then cascade through the economy – raising transportation costs, inflating food prices, and squeezing household incomes.
Inflation, debt, and development at risk
In a country where a large share of the population already spends a significant portion of income on basic needs, a sharp rise in fuel and commodity prices could quickly erode purchasing power.
Public transport fares would likely rise, food distribution costs would increase, and inflationary pressure could intensify across the board.
For the government, the implications are equally stark. Increased import bills would strain foreign exchange reserves, while pressure to subsidise fuel or cushion citizens could widen fiscal deficits.
This comes at a time when the country is almost three months away from commence of implementation of its ambitious long-term development goals under its Dira 2050 vision – goals that depend heavily on macroeconomic stability and sustained investment.
A familiar vulnerability
This is not unfamiliar territory. Past oil price shocks have exposed the vulnerability of oil-importing nations, particularly in Africa.
What makes the current scenario more concerning is the scale: a jump to US$200 per barrel would represent not just a cyclical spike, but a historic disruption with systemic implications.
The timeline outlined by JPMorgan suggests that Asia will feel the first demand shocks, followed by Africa and then Europe. For Tanzania and its regional peers, this means the window to prepare may be narrow – just weeks rather than months.
Turning crisis into catalyst
While the outlook is concerning, it also underscores the urgency of accelerating energy diversification – particularly investment in renewables and domestic energy solutions.
Reducing dependence on imported oil is no longer just an environmental or long-term economic issue; it is a matter of national resilience.
If oil does reach US$200 per barrel, the impact will not be evenly distributed. Advanced economies may absorb the shock. But for countries like Tanzania, the ripple effects could touch every household, every business, and every development ambition. In that sense, the real story is not just about a potential oil price spike – it is about how a distant war could redefine economic realities at home.
