How the War in Iran Lifted Guyana’s Economy

What is the relationship between the conflict in Iran and Guyana’s economy?

The war in the Middle East caused the partial closure of the Strait of Hormuz, through which 20% of the world’s oil passes. This caused the price of a barrel to skyrocket. As Guyana is a new and secure exporter of oil to the West, it now makes much more profit for each shipment sent to Europe and the United States, recording a 68% increase in its weekly sales revenue.

Why did Guyanese oil become so attractive to Europeans?

Since Russia’s invasion of Ukraine in 2022, Europe has sought alternative energy sources. Guyana’s oil is considered ‘high quality’: it is easy to refine and has a low extraction cost. Furthermore, the deposits are located in calm maritime areas, far from war zones, which offers political security to buyers fleeing instability in the Persian Gulf.

Is Guyana already considered an economic power?

In terms of growth, yes. The country has the highest GDP expansion in South America, with averages of 47% per year. In 2026, production exceeded 900,000 barrels per day, placing the small country as the third largest producer on the continent, behind only Brazil and Venezuela. However, the country still faces social challenges, with around 58% of the population living below the poverty line.

What are the structural problems facing the country?

Interestingly, although it exports a lot of crude oil, Guyana has no refineries. This means that the country needs to sell ‘crude’ oil and buy ready-made fuels, such as gasoline and diesel, back from other countries. This dependence causes ironic situations, such as the temporary fuel shortage crisis that occurred in April 2026 due to international logistical delays.

What can Brazil learn from its neighbor’s success?

Experts point out that Guyana had regulatory agility and offered attractive contracts to investors such as ExxonMobil and the Chinese CNOOC. The Guyanese success serves as an argument for the exploration of the Brazilian Equatorial Margin (from Amapá to Rio Grande do Norte), which has identical geological characteristics. While Brazil lags in environmental discussions, Guyana has already mapped dozens of wells and fills a Sovereign Fund with the wealth generated.