Jesse Ramdeo

Se­nior Re­porter

jesse.ramdeo@cnc3.co.tt

For­mer fi­nance min­is­ter Colm Im­bert is urg­ing cau­tion over the re­cent surge in glob­al oil prices, trig­gered by es­ca­lat­ing ten­sions in­volv­ing the Unit­ed States and Is­rael with Iran. He warned that any short-term rev­enue gains for Trinidad and To­ba­go could be off­set by ris­ing im­port costs.

Speak­ing at an Op­po­si­tion me­dia con­fer­ence yes­ter­day, Im­bert de­scribed the cur­rent spike in oil prices as a “dou­ble-edged sword.” While high­er en­er­gy prices can boost gov­ern­ment rev­enue, they may al­so in­crease ship­ping and in­sur­ance costs, which are ul­ti­mate­ly passed on to con­sumers.

“It’s re­al­ly a dou­ble-edged sword. We don’t know how long this war will last,” he said.

Im­bert cit­ed the on­go­ing con­flict stem­ming from Rus­sia’s 2022 in­va­sion of Ukraine as an ex­am­ple of how geopo­lit­i­cal crises can last far longer than ex­pect­ed.

“In 2022, every­one thought the Ukraine war would be over in a month. Four years lat­er, the war is still go­ing on,” he said, not­ing that the con­flict had tem­porar­i­ly boost­ed Trinidad and To­ba­go’s oil and gas rev­enues.

How­ev­er, Im­bert cau­tioned that the out­come of the cur­rent Mid­dle East con­flict re­mains un­cer­tain and dis­missed sug­ges­tions from gov­ern­ment of­fi­cials that the coun­try could see sig­nif­i­cant fi­nan­cial gains.

“We don’t know whether the cof­fers are go­ing to be over­flow­ing with rich­es be­cause of the Iran war. The war may be fin­ished quick­ly—we just don’t know,” he said, ref­er­enc­ing com­ments by En­er­gy Min­is­ter Dr Roodal Mooni­lal.

Ac­cord­ing to Im­bert, oil prices briefly climbed above US$100 per bar­rel fol­low­ing the es­ca­la­tion but lat­er fell in­to the US$80 range af­ter the US Pres­i­dent in­di­cat­ed the con­flict might be short-lived.

He not­ed that the gov­ern­ment’s bud­get is based on an oil price of US$73 per bar­rel, while pre-con­flict prices had been av­er­ag­ing clos­er to US$60.

“It may not even bal­ance out when you con­sid­er that oil prices for the first six months of the year were well be­low the bud­get fig­ure. You might get a small jump for maybe three months, but it may not re­alise the rev­enues the bud­get was pred­i­cat­ed on,” he said.

Im­bert al­so warned that ship­ping com­pa­nies have al­ready in­tro­duced war-re­lat­ed sur­charges on con­tain­er freight, which could dri­ve up the cost of im­port­ed goods.

“Ship­ping rates are al­ready go­ing up. They put a war sur­charge on con­tain­er freight, and in­sur­ance rates will in­crease as well,” he said, stress­ing that as an im­port-de­pen­dent econ­o­my, Trinidad and To­ba­go has lit­tle con­trol over such glob­al de­vel­op­ments.

“If goods from that re­gion are sub­ject­ed to war sur­charges and high­er in­sur­ance rates, then the cost of goods here will in­crease sig­nif­i­cant­ly,” he said. “That is why I say it is a dou­ble-edged sword—you might get a lit­tle rev­enue, but you might get jammed with high­er prices of con­sumer items be­cause of the war sur­charge on freight and so on.”