GEORGETOWN, Guyana—The Guyanese government has issued a stark warning about the potentially severe global economic repercussions stemming from the ongoing Middle East conflict, with particular emphasis on the escalating tensions disrupting the vital Strait of Hormuz. Addressing the 136th General Meeting of the Georgetown Chamber of Commerce and Industry (GCCI), President Irfaan Ali articulated deep concerns that the instability in this critical energy corridor threatens worldwide economic stability, including that of Guyana.
President Ali expressed solidarity with international appeals for diplomatic engagement and peaceful resolution to de-escalate the situation. “I join with President Trump in the United States in urging all parties in the Gulf to move towards dialogue and constructive conversations to normalize the situation,” he stated, highlighting the universal impact of the crisis.
The context of this warning follows the February 28 military strikes by the United States and Israel against Iranian missile infrastructure, military installations, and leadership targets in Tehran and beyond, which resulted in the death of Iran’s long-serving Supreme Leader, Ayatollah Ali Khamenei. In retaliation, Iran has intensified operations targeting U.S. forces and has increasingly focused on energy and maritime infrastructure throughout the Gulf. These actions, including threats to commercial shipping and reported attacks near the Strait of Hormuz, have significantly reduced tanker traffic and ignited international anxiety over potential disruptions to energy supplies.
President Ali underscored the strategic importance of the Strait of Hormuz, a maritime passage responsible for facilitating 20 to 25 percent of global seaborne oil trade and substantial volumes of natural gas. He reported that disruptions have already begun to strain global markets, citing that 17 percent of Qatar’s liquefied natural gas (LNG) capacity has been recently affected. The ripple effects are manifesting in increased costs across multiple sectors; fertilizer prices have surged by 25 percent, a development that portends direct consequences for international agriculture and food production networks.
“These are essential components for manufacturing, industrial development, and most economies around the world,” Ali told the assembled business leaders. He cautioned that even an immediate cessation of hostilities would not avert long-term challenges, estimating that damage to the Gulf’s energy infrastructure could require up to five years for full repair. The heightened risks have already precipitated a sharp rise in freight, transport, and maritime insurance costs, further straining global trade logistics.
In response to these mounting global energy uncertainties, President Ali announced a renewed governmental initiative to establish a domestic oil refinery, framing it as a critical national security priority. Despite Guyana’s emergence as a significant oil-producing nation, it remains heavily dependent on imported fuel, particularly for electricity generation. The substantial fuel expenses incurred by Guyana Power and Light Inc. are vulnerable to global price shocks, and investing in domestic refining capacity is envisioned as a strategic move to gain greater control over fuel supply, pricing, and long-term energy security.
This effort is part of a broader strategy to enhance national energy infrastructure, including the ongoing gas-to-energy project, which aims to reduce reliance on imported fuels and ultimately lower electricity costs. President Ali concluded by emphasizing the necessity of close collaboration between the government and the business community to navigate the volatile global environment and sustain Guyana’s robust economic growth, affirming, “We are vigilant, we are responsible, and we stand ready to make the necessary adjustments.”