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January 21, 2026
January 21, 2026
Guyana’s oil sector is expected to remain commercially viable even in the event of a steep global price downturn, according to the latest Caribbean Quarterly Report published by the Inter-American Development Bank (IDB).
The report says the country is navigating what it describes as a “historic oil boom,” driven by the scale and quality of discoveries in the ExxonMobil-operated Stabroek Block.
While many oil-producing states are vulnerable to price swings, the IDB notes that Guyana’s position is strengthened by the unusually low cost of extracting its crude.
With global oil prices currently trading around US$62 per barrel, the IDB estimates that even if prices were to fall as low as US$28 per barrel, most of Guyana’s sanctioned projects would still be capable of turning a profit.
The bank said the break-even cost for these developments generally falls within a range of US$25 to US$35 per barrel, giving the country a significant buffer against market volatility.
This, the report notes, sets Guyana apart from several other producers in the Caribbean, particularly Trinidad and Tobago.
The twin-island republic, which has produced oil for more than a century, is described as being far more exposed to a potential softening of prices as it grapples with declining gas fields and the challenges of a mature energy sector. As a result, the IDB said Trinidad and Tobago depends more heavily on higher prices to sustain government revenues.
In Guyana’s case, the bank added that the impact of any price decline would likely be cushioned by rising production volumes. By 2030, the country is projected to have as many as seven offshore projects in operation, with combined output exceeding 1.3 million barrels per day.
The IDB’s assessment comes amid broader forecasts of easing oil prices over the medium term.
The report also highlighted Guyana’s strong trade position with the United States, noting that the country’s oil exports are exempt from U.S. reciprocal tariffs. Petroleum accounts for an average of 91 per cent of total exports between the two countries, based on data from the UN Comtrade database.
Since becoming an oil producer, Guyana has seen rapid growth in government revenues, which authorities have been using to expand public investment, particularly in infrastructure, health services, and education.
The IDB said these investments are aimed at strengthening the country’s long-term economic competitiveness and reducing dependence on the energy sector over time.
While the bank cautioned that oil market volatility remains a long-term risk, it concluded that Guyana’s low production costs and expanding output place it in a relatively strong position compared with many other resource-dependent economies.
