“A war 12,000 kilometers away can shake the entire Caribbean economy”

By Nancy Roc

The surge in oil prices triggered by tensions in the Middle East extends far beyond the region itself. For Haitian economist Réginald Surin, an executive at Sogebank, small island economies in the Caribbean are among the most exposed to these global shocks.

In this interview with Nancy Roc, he breaks down the mechanisms through which a distant geopolitical crisis can quickly translate into inflation, currency pressure, economic slowdown, and social tensions across the region.

A conflict already shaking global markets

Since February 28, 2026, the war involving Iran, Israel, and the United States has deeply destabilized global energy markets.

According to Reuters and the International Crisis Group, the conflict has entered its third week, marked by Iranian attacks on strategic infrastructure, disruptions to maritime traffic, and rising tensions around the Strait of Hormuz—a key passage for nearly 20% of global oil and liquefied natural gas trade.

Oil markets reacted immediately.
Brent crude crossed the symbolic $100 per barrel mark as early as the second week of the conflict[1], while as of March 17, 2026, it was still trading around $101.5, compared to $94.7 for WTI[2].

Market anxiety remains palpable.

Exports from the Gulf have been severely disrupted—with an estimated 60% drop in a single week[3]—prompting the International Energy Agency to release record levels of strategic reserves to cushion the shock[4].

When a distant war becomes a Caribbean crisis

For Réginald Surin, the impact of an international conflict on the Caribbean is anything but theoretical.

“There are four transmission channels. And since February 28th, they have all been activated simultaneously.”

These channels are well known:

energy prices, inflation, exchange rates, and production costs.

In open, dependent, and poorly diversified economies, these shocks spread with alarming speed.

The energy shock: structural dependence

The first impact is immediate: rising oil prices.

“The Caribbean is one of the most dependent regions in the world on imported oil. About 90% of oil is imported, and 96% of electricity generation relies on diesel”, says Lubin. The World Bank confirms this structural reality [5].

In other words, the region still runs largely on imported, expensive, and volatile energy.

In Haiti, the situation is even more critical:electricity relies heavily on private diesel generators.

The result: every increase in the price of a barrel translates directly into a higher cost of living.

Inflation: a shock that ripples across the entire economy

Oil acts as a crisis multiplier.

Transport, food, imports - everything becomes more expensive.

“Inflation was already at 25.3% in October 2024. An oil shock adds to an already explosive base.” The IMF confirms this inflationary dynamic[6].

But for Lubin, the issue runs deeper.

“When you combine food, transport, and energy, about 72% of the consumption basket is exposed to energy prices.”

In other words:the oil shock becomes a social shock.

The exchange rate trap

Second wave of impact: currencies.

When oil prices rise, importing countries must mobilize more U.S. dollars.

“This drains reserves, puts pressure on the local currency, and further increases prices.”

It is a classic vicious cycle in dependent economies.

The World Bank highlights that this energy dependence constitutes a major macroeconomic risk for small island states [7].

In Haiti, this translates into increased pressure on the gourde—and inflation that becomes even harder to contain.

Businesses under pressure: the cost of diesel

The energy shock directly hits the productive sector.

“Across the Caribbean, businesses generate part of their own electricity”, Lubin explains.

When diesel prices rise, costs soar.

“Bakeries, factories, supermarkets—everything becomes more expensive to produce.”

Consequences:
• shrinking profit margins
• reduced investment
• job losses
• business closures

A classic downward spiral in energy-fragile economies.

Governments caught in an explosive dilemma

Faced with rising prices, governments are trapped. Subsidize… or let prices explode?

“It’s like a regressive tax imposed from outside.”

Haiti’s recent history is a stark reminder:

The attempt to remove fuel subsidies in July 2018 triggered major riots and led to the fall of Prime Minister Jack Guy Lafontant’s government.

In these economies, fuel is a political commodity.

An economy already on the brink

This shock comes in an already extremely fragile context.The IMF estimated Haiti’s GDP contraction at around –4% in 2024[8].

In this landscape, the diaspora plays a vital role. Remittances reached approximately $4.1 billion in 2024[9].

But they too are vulnerable.

“When the cost of living rises in Miami, remittances decline.”

Thus, the oil shock also hits… transnational family solidarity.

A dependence laid bare

For Réginald Surin, the diagnosis is unequivocal:

“If a war 12.000 kilometers away drives prices up here, it means our economy is not sovereign.”

This dependence is the result of decades of underinvestment.

And it exposes the region to every geopolitical shock.

Energy transition: a strategic urgency

Yet solutions exist.

“The Caribbean has exceptional solar and wind potential”, says Surin.

The World Bank and the IDB emphasize this opportunity[5]. But the current reality remains alarming:

“Haiti has less than one megawatt of installed solar capacity.”

The energy transition is therefore not an ecological luxury. It is a condition for economic survival.

The truth every crisis reveals

Behind the volatility of oil markets lies a harsher reality:

The Caribbean does not merely endure global crises. It amplifies their effects.

Every war, every energy shock, every geopolitical tension acts as a revealer.

It exposes a truth we often prefer to ignore:
1. Political independence does not guarantee economic independence;
2. Without energy sovereignty, there can be no real stability.

Today, it is not only oil prices that are rising. It is the cost of dependence.

And as long as this dependence persists, Caribbean economies will remain suspended on decisions made elsewhere—in distant capitals, on invisible battlefields, but with very real consequences in every household in Port-au-Prince, Kingston, or Bridgetown.

Footnotes
[1] Reuters, Oil prices rise after renewed Iranian attacks, March 17, 2026.
[2] Reuters, Stocks rise as oil prices ease off earlier highs, March 17, 2026.
[3] Reuters, Iran’s $200 oil threat, March 17, 2026.
[4] Financial Times, IEA releases record oil reserves, March 2026.
[5] World Bank, Caribbean Energy Sustainability Project, 2025.
[6] IMF, Haiti Article IV Consultation, December 2024.
[7] World Bank, Energy dependency in small island states, 2024.
[8] IMF, Haiti Staff Report, 2024.
[9] World Bank, Remittances Haiti, 2024.

Tous les textes de « Roc et Vérités » sont protégés par le droit d’auteur. Toute reproduction, partielle ou intégrale, est strictement interdite sans l’autorisation préalable d’AlterPresse ou de Mme Nancy Roc.