Dear Editor,
The closure of the Strait of Hormuz – a critical artery through which approximately 20 per cent of the world’s traded oil and a significant portion of global liquefied natural gas (LNG) transits – has triggered a cascading global economic shock. While Guyana is not directly dependent on Middle Eastern oil imports, the ripple effects of this closure are being felt acutely across our supply chains, fuel costs, and household food security.
The global energy market has responded with sharp price increases. Shipping freight rates have surged as vessels reroute around the Cape of Good Hope, adding thousands of miles and days to journey times. These costs are being passed directly to consumers in small and import-dependent economies such as ours.
Guyana faces the following immediate pressures:
▪ Fuel and energy cost escalation affecting transportation, electricity generation, and agriculture
▪ Rising prices of imported food commodities including wheat, rice inputs, and processed foods
▪ Increased shipping and freight costs for all imported goods
▪ Supply chain delays affecting availability of essential medicines and consumer goods
▪ Inflationary pressures on the cost of living for ordinary Guyanese citizens
One may ask, why is Guyana affected if it produces its own oil? The answer is simple; Guyana’s crude oil production is largely exported as a raw commodity. Our domestic fuel supply, like most CARICOM nations, is still subject to refined petroleum product imports and global pricing benchmarks.
The decisions made in distant seas and troubled straits have reached into every Guyanese kitchen and every family’s pocket. The closure of the strait – a narrow waterway thousands of miles from our shores – has sent shockwaves through the global economy. The price of fuel has climbed. The cost of food has risen at our markets. Transportation has become more expensive. These are real pressures on real families. From the mother stretching her budget at the market, to the minibus driver absorbing higher fuel costs, to the small business owner watching margins tighten, all are adversely affected.
When global shipping routes are disrupted, small nations feel it first and feel it hardest. Since Guyana imports a significant portion of goods, when freight costs surge and fuel prices rise on world markets, those costs come home with every cargo ship that docks at our ports.