Ethiopia Faces Energy and Fertilizer Shock From Middle East Turmoil

By Omar M. ElmiWednesday April 1, 2026

A war far from Ethiopia’s borders is already sending tremors through the country’s economy. The fighting in the Middle East is inflicting heavy human and material losses, but its reach is extending well beyond the battlefield, with disruptions that could hit trade, fuel supplies and food production in countries thousands of kilometers away. Ethiopia, landlocked and home to more than 120 million people, sits squarely in that danger zone.

The risk is rooted in a basic structural weakness: Ethiopia depends deeply on outside supply routes for both fuel and farm inputs. More than 95% of the country’s imports and exports move through Djibouti, making the Djibouti–Addis Ababa corridor the country’s economic lifeline. That reliance becomes especially sensitive when it comes to energy, where any interruption can spread quickly through the wider economy.

Most of Ethiopia’s fuel imports are handled in Djibouti, notably through the Doraleh oil terminal (Horizon), where petroleum products are stored before being transported inland by tanker trucks. Hundreds of trucks travel daily along this corridor to sustain Ethiopia’s economy. Under calm conditions, the system functions efficiently. Under pressure, it is exposed.

At the heart of that exposure is the Strait of Hormuz. Roughly one-fifth of the world’s oil, along with a substantial share of liquefied natural gas, passes through this narrow maritime passage. Any disruption—whether caused by military escalation, security threats or shipping restrictions—can quickly push up prices and tighten global supply.

Signs of strain are already emerging in Ethiopia. Prime Minister Abiy Ahmed has urged citizens to conserve fuel and use it only for essential needs. The appeal underscores growing pressure on available supplies and shows how a regional crisis is beginning to spill into domestic life.

For Ethiopia, the likely first effect would be more expensive fuel. Rising international oil prices would raise the cost of imports, creating a chain reaction across the economy. Transport along the Djibouti corridor would become costlier, pushing up prices for goods and services. Inflation, which has remained a concern in recent years, would almost certainly come under renewed pressure.

Yet Ethiopia’s exposure does not stop with energy. A second vulnerability lies in agriculture, where the country depends heavily on imported fertilizers.

Agriculture is the foundation of Ethiopia’s economy and the main source of income for most of its people. But the sector relies heavily on external inputs. In recent years, Ethiopia has imported between 1.6 and 1.8 million tons of fertilizer annually, mainly urea and compound fertilizers (NP). According to the International Fertilizer Development Center (IFDC), it is the largest fertilizer importer in Africa. These products are vital for sustaining yields in a country that cultivates more than 20 million hectares and where food security depends largely on cereal production.

The fertilizer market is tied closely to energy markets. Nitrogen-based fertilizers such as urea rely heavily on natural gas in production, which means that any rise in energy prices feeds directly into fertilizer costs. With tensions centered on the Strait of Hormuz, that link becomes even more important.

A prolonged disturbance in the region could therefore deliver Ethiopia a double blow. Fuel prices would rise on one side, while fertilizer prices could climb or shipments could be delayed on the other.

The impact on farming could be severe. If producers cannot access fertilizers in the necessary quantities or at affordable prices, yields could fall. That would affect rural incomes and send food prices higher across the country. In a nation where food security remains a persistent concern, such pressure would deepen existing weaknesses.

The consequences would not be limited to economics. Rising costs for essential goods could also strain households and add social stress, especially among families already grappling with inflation. In that sense, shocks originating abroad can rapidly become domestic hardships.

The present crisis is a reminder that supply chains often treated as commercial matters can carry strategic weight. For Ethiopia, fuel and fertilizer imports are more than business transactions. They are matters of national security.

Reducing that exposure will require a deliberate strategy. Expanding fuel storage, diversifying suppliers and improving transport infrastructure are all part of the answer. Agricultural policy also has a role to play, especially efforts to use inputs more efficiently and curb dependence on imports.

The Middle East conflict also illustrates a broader reality: today’s economies are tightly interconnected. A disruption at a distant maritime chokepoint can ripple out quickly and affect countries far from the source.

For Ethiopia, the Strait of Hormuz is not an abstraction. It is a crucial supply artery. If that artery is disrupted, the effects will be felt in transport, in markets, on farms and in the daily lives of millions.

Sources

World Bank – Addis-Djibouti trade corridor reports
U.S. Energy Information Administration – Global oil and LNG transit through the Strait of Hormuz
Reuters – Energy market disruptions and global supply risks (2026)
AfricaFertilizer – Ethiopia fertilizer import statistics (2023–2024)
FAO – Linkages between energy and fertilizer prices
Djibouti Ports and Free Zones Authority – Doraleh and Damerjog infrastructure data