Guyana, already the world's fastest-growing economy, is set to benefit even more from rising oil prices due to the Iran war. The tiny Caribbean nation of nearly 1 million people holds an estimated 11 billion barrels of oil reserves.
President Irfaan Ali emphasized that Guyana will not repeat the mistakes of other oil booms that left ghost towns and depleted forests. Rapid development by an Exxon Mobil-led consortium boosted output to over 900,000 barrels per day in just seven years.
GDP quadrupled to $27.5 billion between 2019 and 2024. However, the government faces the challenge of managing oil revenue to avoid boom-and-bust cycles. Its 2019 sovereign wealth fund holds all oil revenue for steady development.
Crude prices have risen 30% since the Iran war. At $100 per barrel, Guyana's oil revenue could reach $4.3 billion, 67% higher than last year. The Exxon consortium may recover its costs this year, after which Guyana's profit share will jump from 12.5% to 50%.
Ali cautioned that higher oil prices also increase import costs for goods including fuel and fertilizer. Infrastructure lags: open sewage drains and power outages are common in Georgetown.
Guyana benefits from direct Atlantic access, avoiding chokepoints like the Strait of Hormuz. Its low break-even price ($25-35 per barrel) and proximity to U.S. markets are advantages. Even if the war ends, Guyana's stability will solidify its position.
However, most GDP growth is concentrated in the oil sector. The government is expanding local content laws requiring oil firms to contract with Guyanese businesses. Business owners support this but face challenges like inflation and fronting.
Exxon's Guyana president Routledge called it a mixed blessing as energy prices rise for locals.
