How Middle East conflict and soaring oil prices will affect Angola’s Chinese debt deals
The African nation has a clause in its deal with Chinese lenders that could help fresh up extra cash for new projects
On Thursday, following renewed tanker attacks, Brent crude oil prices surged back past US$100 a barrel, having reached a peak of US$119.50 on Monday, the highest level since 2022.
The closure of the Strait of Hormuz, a key maritime chokepoint through which about 20 million barrels of oil and petroleum products flowed daily, has crippled energy supplies.
Compounding the problem, attacks by the Yemen-based Houthi rebels on ships using the Bab el-Mandeb Strait and Suez Canal – the vital maritime arteries connecting Asia, Africa and Europe – have prompted some major shipping lines such as Maersk and Mediterranean Shipping Company or MSC to reroute vessels around Africa’s Cape of Good Hope.
While higher oil prices threaten net importing African nations such as Kenya, Ethiopia and Uganda, for Angola it offers the opportunity to replenish debt-reserve accounts with Chinese lenders and support new loans for projects such as the Lobito refinery.
A clause in Angola’s debt-reprofiling deal with Chinese lenders such as the China Development Bank (CDB) states that when the oil price exceeds US$60 per barrel, extra revenue is placed into a reserve account for debt repayments.