The ceasefire that went into effect between Israel and Iran on 24 June has brought a measure of relief to global oil markets, calming fears that sent crude prices soaring during the height of hostilities. Amid escalating tensions, Brent crude spiked to over US$80 per barrel, sparking worries that Cayman’s recent dip in energy prices could soon reverse course.
The brief but intense Israel-Iran conflict sparked concerns that Iran might close the Strait of Hormuz — a critical choke point for about 20% of the world’s oil — disrupting global markets and highlighting Cayman’s vulnerability as an oil-dependent nation.
Cayman’s energy fragility
Higher oil prices threaten Cayman’s economy, with the potential to inflate electricity bills during the hottest summer months, squeeze household budgets at the gas pump and drive up food prices due to rising shipping costs. Cayman imports roughly 90% of its food, making it especially exposed to spikes in global energy prices. As a tourism-dependent nation, Cayman also faces the prospect of pricier air travel, discouraging visitors and undermining a key pillar of its economy.
Sacha Tibbetts, vice president at Caribbean Utilities Company, told Compass Media’s Chief Political Correspondent Tammi Sulliman during a 19 June discussion on Forefront that although efficiency initiatives at CUC have helped keep energy prices down during the summer months, any upheaval in global oil markets is bound to impact Cayman sooner or later.
“Almost certainly that’s going to result in a rise in fuel prices,” Tibbetts said. “Not right away in Cayman, but soon enough … those prices will start showing up at the pump and on electricity bills. … There’s a time lag with the electricity bill, so maybe it won’t be until August or even later. But there’s definitely a change in oil prices that we’re seeing already. How long it will last, of course, that’s completely out of everybody’s control.”
Elsewhere in the Caribbean, leaders raised similar concerns.
“Oil prices are already rising,” said Sir Ronald Sanders, Antigua and Barbuda’s ambassador to the US, during a 24 June interview. “If tensions continue, the cost of energy, tourism, and even basic services like water delivery will be affected because they all rely on electricity.”
Guyana’s President Irfaan Ali, during a speech that he made at the peak of the war, warned, “We cannot afford another war and more so, as I speak to you today … the price of fuel has already increased by more than 8%. … More than 30 million people will go into chronic hunger.”
However, as fears of a prolonged supply crisis began to subside with news of a ceasefire, markets reversed course. Brent crude plunged more than 12% last week — its largest one-day drop since 2022 — as confidence grew that vital oil flows through the Strait of Hormuz would remain uninterrupted.
Robin M. Mills, CEO of Qamar Energy, noted that Iran’s repeated threats to close the strait lacked substance, comparing it to the fable of “the boy who cried wolf”. Any blockade would cripple Iran’s own economy and provoke severe retaliation. He also pointed to the fact that Israel likely avoided targeting Iran’s oil export infrastructure to prevent a global energy crisis, instead focusing on domestic sites to send a message without causing lasting supply disruptions.
Closer to home, economist Marla Dukharan shared Mills’s more measured outlook, pointing to weak global demand and ample US strategic reserves.
“While events in the Middle East regarding the oil and gas sector in particular, combined with the effect of the speculators, would usually lead us to expect significantly higher oil prices, this time, I am not so sure,” Dukharan told the Compass on 23 June.
“On the supply side, the US has just under 400 million barrels in its strategic reserves which it can use, and there’s the other 80% of global supply not affected by any closure of the Strait,” she continued.
“On the demand side, right now the global economy is in a recession, and is seeing the weakest growth in about 20 years apart from COVID. This weak global growth was forecasted by the IMF in April to persist into 2026, and this was before the attacks on Iran. Layered on top of all this is massive uncertainty and the damage to confidence, which has no good reason to improve. In the end, we will likely see some upward pressure on oil and gas and by extension electricity and fuel prices, but I do not expect the kind of levels we saw in 2008 for example – not even close.”
Dukharan cautioned that with Cayman already facing one of the highest costs of living in the region, any upward pressure on fuel prices would demand careful monitoring and swift action to shield consumers.
Despite the recent dip in prices, Cayman remains acutely exposed to distant geopolitical events. Even in calmer times, the country pays a steep price for its reliance on imported oil — both economically and environmentally — while periods of instability can cause painful price spikes.
Although experts don’t foresee an immediate increase in local fuel prices following the ceasefire, the recent turmoil highlights the pressing need for Cayman to diversify its energy sources.
The case for renewables grows stronger
“As long as we’re running on diesel engines, we’re going to be running on this roller coaster of whatever is happening in the geopolitical space dictating our cost of energy,” Tibbetts said.
Yet Cayman’s renewable energy transition has hit headwinds. Regulators recently approved plans for 90 megawatts of new fossil-fuel generators — a decision critics warn will lock the country into decades of diesel dependence. Despite repeated calls to invest in large-scale solar and battery storage that could lower electricity costs and advance the National Energy Policy’s target of 100% renewable energy by 2045, Cayman still sources just 3% of its power from renewables.
Prioritising conventional thermal generation over clean energy risks both immediate savings and long-term sustainability, leaving Cayman exposed to the next geopolitical shock.
“We need to be making moves to move away from diesel as expeditiously and as safely as we can,” Tibbetts said.
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Oh the irony for some of us here seeing these comments made publicly when we know the history of how they responded to these very same arguments for the better part of a decade.
“As long as we’re running on diesel engines, we’re going to be running on this roller coaster of whatever is happening in the geopolitical space dictating our cost of energy,” Tibbetts said.
We need to be making moves to move away from diesel as expeditiously and as safely as we can,” Tibbetts said.”
For so many years these same people claimed the rest of us who were making these arguments to them were ‘crying wolf’ about these same critical risks to Cayman and the importance of going all in on renewables as the answer.
Now almost a decade later they’re finally beating the drum as hard they can, using our reasoning as their own, all with the (unspoken) caveat that they ensure to do all this while trying to move from a fossil fuel monopoly to a renewable energy monopoly in the process.
Don’t be fooled. These guys have always been behind the curve on this issue, have no qualms about engaging in hypocrisy, all while focusing on company over country.
Noting has really changed except some of the messaging. Maybe that’s some small progress but ‘their vision’ of the renewables energy future for Cayman isn’t the one that’s best for Cayman as it will be predicated on an aversion from consumer choice and competition and focused on CUCs profits and control.
James W. is right: Based on our experiences in Germany and the EU, and having helped founding a corporation, gaining knowledge about this issue, and spreading it to whomsoever, I can tell You: It’s always the major companies who want to stay in control – as of today, they are claiming for “investments of tax payers money in renewables and in batteries”. But: 1. Battery technologies are years away from making economic sense, as still being much too expensive. 2. You would have to build – and pay for! – a net of cables all over the island, to transport the electricity to every building, and due to hurricanes etcetera, it has to be under the surface. 3. You have to install a net of AI-steered control and managing if the flow of the electricity, because the whole issue is VERY COMPLEX to handle. All that will take a lot of time and a large amount money. The very much easier and better way is to de-centralize the production and use of electricity, and to encourage everybody, to install solar panels on his roof and fassades, maybe combined with a battery storage – now, or even later, as soon as their techniques will be more efficient and their prices will decrease. For instant – what we are doing in Germany successfully right now, is, to install so called “balcony power plants”, which are affordable, easy to handle and install and have paid their price and give a return on investment already after about to years. And my second advice would be: Use the organic waste! Build 1 or 2 collecting places, where the wastes are sorted, and have them transformed into methan e.a. gases, land/or liquid fuels, that can be used a) to drive vehicles like cars, buses etcetera, and b) in a thermic process, to produce electricity, which could be used to support the buildings, around. All in all, I wish You luck, because I learned to love the Caymans during my visits, very much! Cheers and kind regards! Hans Rainer (PS: If You would like to get some more information from our “know how pool”, far away in Germany/Europe: Feel free to contact me: KMC Media Consulting, Hans Rainer Kretschmer, Berliner Straße 21, 57319 Bad Berleburg, Email: [email protected], Phone:+49 1757070362)