In response to attacks from the USA and Israel, Iran’s decision to block the Strait of Hormuz, a critical passage for 20 percent of the world’s oil supply, has left many countries in a state of worry. Guyana, in particular, has found itself with a mixed bag of blessings and concerns.
The conflict, which began on February 28, 2026, has driven oil prices to US$100 per barrel. The upside for Guyana in this scenario is that the State will earn more revenues from the Stabroek Block, where ExxonMobil Guyana Limited is the operator.
The downside, according to recent statements by President Dr. Irfaan Ali is what requires equal or even greater attention. At the recent Annual General Meeting of the Georgetown Chamber of Commerce and Industry (GCCI), President Ali highlighted Guyana’s vulnerabilities in the current environment.
He reminded that Guyana is still largely an importer of refined products, thereby making it susceptible to the impacts of increased prices. The president said this state of affairs now warrants a return to the conversation of establishing a refinery for Guyana.
“Whilst one of the strategies is to increase our storage capacity and take it to a few months where we can have better control of price differentials and extreme shock on the market, I believe we should return to the conversation of a refinery for national security,” the president said.
He added, “We have to, in this hemisphere, optimise the development of our resources… These are no longer farfetched thoughts. These are now realities that we must embrace.”
The president was keen to point out that rising tensions in the Middle East will not only affect the cost of refined products Guyana imports, but even air transport, tourism and fertilizer costs will increase across the world.
The situation facing Guyana, and the world over, is a frightening one Ali underscored at the meeting. He stressed that it has to be seen in the context of measures implemented to address COVID-19 pressures that have yet to be rolled back. These include the government’s annual allocation of billions of dollars to subsidise electricity and shipping costs for consumers.
In the current oil price environment, and given that the State has “maximised its tools”, the president noted that private stakeholders must now step up to complement the government’s efforts.
“GuyOil is operating at a deficit now, but it will have to operate at a breakeven at least to stabilise the market and then we have a private sector whose profit margins were 30 to 35%. This is the time for you to make some adjustments in the interest of the consumers,” the president said.
Private sector stakeholders such as past GCCI President and VESHI Director, Nicholas Deygoo-Boyer have commended President Ali for his government’s interventions.
During his first appearance on the Starting Point podcast, Deygoo-Boyer noted that the government has made significant efforts to absorb major shocks that could send cost-of-living pressures even higher. But the current crisis, in his view, is one that places the business community “between a rock and a hard place.”
The businessman said many businesses cannot afford to absorb costs in the way government has done.
“For businesses, our issue is that a lot of us are expanding and this means we have taken on debt to fund new projects. So it’s very hard to not pass on the inflation,” said Deygoo-Boyer.
He said the perception in some quarters is that Guyanese businesses are racking up major profits. In a lot of cases, he said, companies are still to reach that profit-making point on their investments.
From varying vantage points, Deygoo-Boyer said “it is a very tough situation” facing stakeholders, adding that it requires continued collaboration on solutions that work for all Guyanese.