Analyst Says – By Kisean Joseph
Analyst Says Rising Oil
An analyst is warning that the ongoing conflict in the Middle East is poised to drive up the cost of living in Antigua and Barbuda, with fuel, food, transport, and airline tickets all likely to feel the pressure in the months ahead.
Dr George Daniel, speaking on Observer AM, said the sharp fluctuations in global oil prices seen in recent weeks are being driven primarily by market perception — meaning that political statements and military developments are moving prices as much as actual supply disruptions.
“The market is subject to whatever perception there is. So that when Mr (Donald) Trump gives an indication that the war may come to an end and things may return to normal, then the price will go down. When Iran bombs some oil terminal, the price is going to go up,” Dr Daniel said.
He explained that approximately 20 percent of global oil supply passes through the Strait of Hormuz in the Persian Gulf — a corridor that Iran has reportedly moved to blockade. With that supply constrained, Dr Daniel said the basic principle of demand outpacing supply is driving prices upward, with any sign of relief causing temporary dips.
Antigua and Barbuda sources its fuel primarily from the United States Gulf Coast, which Dr Daniel said means the country’s supply is not immediately under threat. The United States, he noted, is a net exporter of petroleum products, and there is no foreseeable attack on storage facilities along the Gulf Coast.
However, he cautioned that the price impact is already baked in. Refineries purchase crude oil on futures contracts — locking in delivery prices two to three months in advance. With future prices currently elevated, Dr Daniel said Antigua and Barbuda will be paying higher prices for fuel shipments already contracted, regardless of what happens on the ground in the Middle East.
He said the ripple effects will extend well beyond the gas pump.
“Energy drives everything, so let’s start with your transportation sector. If the price goes up, the taxis, the buses, the trucking, all of those prices are liable to increase because their costs have gone up. Food is imported – it has to be transported. Those transportation costs will be passed on, and therefore food prices will go up,” he said.
Dr Daniel also flagged the potential impact on tourism — warning that rising jet fuel costs will push airline ticket prices higher, which could reduce visitor arrivals. Cruise ship bunker fuel costs would similarly increase, he said, potentially affecting that segment of the tourism market as well.
On local fuel pricing, Dr Daniel offered a breakdown that challenges common assumptions about who controls pump prices. He said the margins for wholesalers and retailers are fixed — with the wholesaler earning approximately one dollar per gallon and the retailer just over a dollar. The variable, he said, is government taxation.
“The price at the pump will be determined primarily by how much taxes the government wants to make,” he said.
Dr Daniel estimated that Antigua imports approximately one hundred thousand barrels of fuel per shipment — roughly one tanker load per month. He noted that if the government maintains its current level of taxation, pump prices could reach between EC$17 and EC$19 per gallon.
The analyst speculated that there will be no price increase before the by-election in St Phillip’s North slated for today.
