Caribbean & Central America - June 2026

Two interlocking questions are being asked in Kingston. One is whether recent offshore exploration will reveal commercially viable oil and gas deposits. The second: if the oil really is there under the sea, does it make economic and environmental sense to develop it?

Back in April, an Irish headquartered company called United Oil and Gas, which holds a production sharing agreement (PSA) with the Jamaican government for the southern Walton-Morant basin, said it had completed a geochemical survey which indicated the presence of an “active petroleum system”. Energy minister Daryl Vaz said the government was “cautiously optimistic”.

The next step would be to drill one of a possible 14 wells, at a cost of US$60m-$80m. United Oil would look to bring in a foreign oil company to fund the drilling. Vaz said that depending on what is found on the seabed and on negotiations with the oil companies, drilling might happen by 2027 or 2028.

But if the oil is there, should it be developed? In May a group of environmental lobby groups led by the Jamaica Environment Trust (JET), a non-profit NGO, published a report stating that some of the country’s most ecologically significant marine habitats could be threatened by exploration in Walton-Morant, an area which overlaps with coral reefs, seagrass beds, and key fishing grounds for coastal communities. Oil production in the basin could threaten 18% of the country’s most important marine eco-systems.

JET chief executive, Theresa Rodriguez-Moodie, says that these marine eco-systems are already under stress from climate change, pollution and overfishing. She was cited by the local media as saying, “Instead of pushing for oil and gas expansion, we must focus on protecting our oceans and investing in healthy ecosystems, resilient communities and sustainable livelihoods.”

Those more favourably disposed to the development point to its ability to create jobs and increase revenues for local communities. Courtney Lindsay from UK-based global affairs think tank ODI Global was cited by British newspaper The Guardian as saying “Talking about the climate crisis is a first-world problem. We don’t have the luxury of saying ‘we don’t want to contribute to this issue’ because we are talking about a bread-and-butter issue.” Lindsay argues that no policy makers would even think about foregoing oil revenues because there are so many other demands for funding in education, health, and welfare.

Because Jamaica imports virtually all of the crude oil it consumes, it remains vulnerable to global oil shocks and volatility, costing it some US$1.5bn-US$2bn on estimates cited by The Guardian, offsetting some of the benefits from tourism, which in 2024 was the top foreign currency earner, generating US$4.3bn according to the tourism ministry. This year the war in Iran has raised oil prices sharply and hit the economy hard, with the International Monetary Fund (IMF) forecasting that Jamaica’s GDP is set to contract by 1.2% in calendar year 2026 just as oil-producing neighbours Guyana and Suriname enjoy a surge in growth.

For some, the rise in fossil fuel price should be taken as an opportunity to accelerate the transition to renewables. Currently renewables such as solar, hydropower, and wind provide only 13% of total Jamaican electricity generation with the government saying that should increase to 50% by 2030.

IMF concerned over St Kitts and Nevis

An International Monetary Fund (IMF) Article IV report on the economy of St Kitts and Nevis released in May says the fiscal deficit is high while the current account deficit “remains wide despite resilient tourism activity”. However, despite higher oil prices caused by the war in the Middle East, the economy is still expected to rebound this year with 2.3% GDP growth, up from 2.1% in 2025. Inflation is projected at an average 2.2% (vs 1.5% in 2025). The IMF says fiscal consolidation is “critical” to stabilise debt.