Jamaica is keeping an eye on the rising oil prices globally through the state-owned petroleum refinery, Petrojam Limited, as oil prices surge due to escalating tensions in the Middle East.
There has been a roughly US$10 jump per barrel in a matter of days, as the U.S.-Israeli war on Iran halted energy exports from the Middle East. Tehran has responded by attacking ships and energy facilities in the Gulf, forcing production stoppages from Qatar to Iraq.
“The extent of any local impact will depend on how sustained these international price movements are,” Minister for Energy, Science, Telecommunications and Transport Daryl Vaz said during a post-Cabinet press briefing on Wednesday.
He said Petrojam is closely monitoring changes in the United States Gulf Coast Reference (USGC) for finished petroleum products, which is the primary pricing benchmark for the region and determines Petrojam’s ex-refinery prices.
The Planning Institute of Jamaica (PIOJ) has also warned that Jamaica’s economy will be adversely affected by the ongoing conflict in the Middle East. PIOJ Director General Dr Wayne Henry said the country now faces a “negative” short-term outlook based on the preliminary data for the October–December 2025 quarter, which was presented at a PIOJ’s quarterly briefing on Tuesday.
“Emerging geopolitical uncertainties, including from the ongoing dispute in the Middle East, may potentially impact the Jamaican economy through supply-side challenges due to disruptions to oil distribution in the Gulf, resulting in a hike in oil prices. This is likely to cascade into increased prices for other items, such as industrial and agricultural commodities,” he said.
Dr Henry noted that the combination of higher energy costs, disruptions to logistics and generally low confidence levels may result in a drag on global trade. He noted that there are concerns regarding the possibility of an economic recession.
An increase in the cost of oil feeds directly into petrol and diesel prices, as well as the cost for aviation fuel and shipping. It also shapes the cost of transporting and producing everything from food to manufactured goods.