Garfield Ekon
Staff Writer
The recent attack on the Sate of Israel by the Islamic Republic of Iran, has delivered growing uncertainty across the Caribbean region, and the rest of the global economy.
Chief among the many concerns, is the free flow of oil from the Middle East, which stands at 31% of daily production for the global economy. At minimum, shipping costs are likely to increase based on the increased risk of military action in the Persian Gulf.
Pressure is also building on US and European insurance clubs to avoid any transaction, including those with China, that involve Iranian crude and additional rerouting of oil and gas shipments in response to Houthi threats, or Allied responses.
According to the Caribbean Community Council of Foreign and Community Relations (COFCOR), “these developments not only exacerbate the already tense situation but also pose significant threats to regional stability and international peace,” the group warned in a media statement.
It added that the continued cycle of retaliation, including the recent attack on Israel by Hamas, Israel’s “disproportionate response” in Gaza, and the “alarming new dimension of direct confrontations between Israel and Iran, leads to an untenable situation fraught with potential for greater regional conflict and global instability.
“The human toll of this conflict, highlighted by tragic incidents such as deaths and injuries to children, demand an immediate and empathetic response from the global community. It is imperative that there be no further escalation that can lead to more suffering and instability,” it said.
While calling for an immediate cessation of hostilities between Israel and Iran, the regional body underscored that it strongly urges both nations to halt any further military actions that could worsen the situation, endangering not only their own populations but also the broader international community.
“We implore all parties to consider the severe consequences of further conflict and to commit to diplomatic solutions that ensure the safety, sovereignty, and dignity of all people involved,” the CARICOM statement said.
On October 6, 2023, the day before Hamas attacked Israel, the international benchmark Brent crude was trading at $85 per barrel and has been fluctuating at up to $96.
On Thursday, it traded at $91 per barrel. With the exception of gas-rich Trinidad and Tobago, the 14 other countries of CARICOM, are energy importers.
Approximately 93 percent of the region’s energy needs are met by oil imports, which average 13% of Gross Domestic Product (GDP).