No matter how tough the markets get, Guyana’s oil will still remain king. This was the essence of the latest Caribbean Quarterly Report published by the Inter-American Development Bank (IDB).
The financial institution noted that Guyana is managing “a historic oil boom” given the scale of the resources found in the ExxonMobil-operated Stabroek Block. What sets Guyana apart from other oil producers is not just the quality and quantity of its oil, but also the low cost of producing it. The IDB noted that if oil prices, currently at US$62 a barrel, drop to US$28, profitability remains likely for the country since most of its sanctioned oil projects to date are within the US$35 to US$25 break-even range.
The IDB said the same cannot be said for Trinidad and Tobago, which will be impacted the most if oil prices soften. This CARICOM nation has been producing oil for over 100 years, but now struggles to rescue its economy from the pains of declining gas fields. “As a mature oil producer, it needs high prices to maximize its oil revenue…” the report said.
The report said, “The economic impact on Guyana from the possible reduction in oil prices will be somewhat mitigated because volume is expected to expand.”
By 2030, Guyana is expected to have seven projects in operation, producing over 1.3 million barrels of oil. According to the World Bank, oil prices are expected to decline by 12.9 per cent to US$68 per barrel in 2025 and US$60 per barrel in 2026. Moreover, they are expected to stay in this range in 2030.
The IDB was also keen to point out that Guyana’s oil is exempt from reciprocal tariffs imposed by the U.S. The financial institution said oil represents, on average, 91 per cent of total exports between the United States and Guyana, according to the UN Comtrade database.
In recent years, Guyana has strategically utilised its oil revenues to invest in world-class education, healthcare, and infrastructure, all aimed at boosting national competitiveness. This approach has allowed Guyana to not only set the foundation for sustainable long-term growth but also accelerate opportunities for the empowerment of its people.