This paper presents the first systematic econometric analysis of the macroeconomic spillover effects of this shock, combining a structural vector autoregression (SVAR) model estimated on monthly data (2012-2026) with panel regression analysis of ten economies - five East African Community member states and four Gulf Cooperation Council states. The SVAR identified three transmission channels: direct fuel price, general inflation, and output contraction. Impulse response functions show that a one-standard-deviation Brent crude shock produces a peak global CPI increase of approximately 1.8 percentage points at six months and a peak output contraction of approximately 0.7 percentage points at nine months. Panel regression confirms significant negative effects on EAC GDP growth (β = −0.127, p < 0.001) and significant positive effects on GCC current account balances (β = +0.300, p < 0.001), with Burundi and Kenya displaying the largest negative sensitivities. The Hormuz rerouting effect adds a delayed spillover, approximately 15 percent of the direct shock magnitude, peaking at 15 months. Findings directly inform IMF debt sustainability frameworks, EAC fiscal policy design, and international energy security governance.
