Editorial | Dangers of Middle East war

The outbreak of war in the Middle East after Israel and the United States bombed Iran at the weekend is bad for the Caribbean as a whole.

But it holds potentially greater risks for Jamaica as the island pivots to rebuilding after Hurricane Melissa in October. The Category 5 storm left and estimated US$8.6 billion in damage, or around 41 per cent of the country’s GDP.

Which is why Jamaica and the Caribbean Community (CARICOM) should join the secretary general of the United Nations, António Guterres, in counselling restraint, de-escalation and a return to diplomacy, rather than egging on a preferred side, as some CARICOM states have done.

For as Mr Guterres feared when he spoke at an emergency meeting of the Security Council on Saturday, the fallout from the attack is already a “wider conflict with grave consequences for civilians and regional stability.”

Unfortunately, those consequences won’t be contained to the Middle East and the Gulf region and will only worsen the longer the conflict continues. With respect to Jamaica, one effect is likely to be immediate in the higher cost of energy.

Jamaica imports around US$2 billion worth of oil annually, accounting about 27 per cent of the country’s overall import bill. It will take time for the continued building of renewable energy systems for much of that petroleum imports to be substituted.

SPIRALLED UPWARDS

However, in the days since the war started and Iran’s retaliation by sending rockets into Gulf countries, the price of oil has spiralled upwards. Brent crude, having fallen back from its 13 per cent rise on Sunday, up more than eight per cent on its pre-war price, to US$79 per barrel, on Monday. US crude was up 7.5 per cent.

Even before the hostilities began, global oil prices have this year been on a sharp upward trajectory in the face of the US president, Donald Trump’s increasingly heated rhetoric against Iran and its alleged nuclear ambitions.

The bottom line is that if oil prices settle, on average, five per cent higher in 2026, that potentially could add US$100 million, or over J$15.5 billion, to Jamaica’s oil bill. This increased costs would work its way through the economy, with implications for cost of electricity, growth and exchange rate stability.

This is at a time when Jamaica’s room for manoeuvre is limited. In the post-hurricane environment, the economy is already projected to contract by more than two per cent in 2026, and the government was forced to impose over J$18 billion in new taxes for the 2026/27 fiscal year to help close financing gaps in its budget.

It is possible, too, that the Middle East crisis could have a knock-on effect on the wider global economy, causing an increase in prices in other commodities, or a slowdown in global travel that will affect Jamaica’s critical tourism industry, which is the island’s major earner of foreign exchange. Few Caribbean economies would be spared the effect.

Further, the idea of the Gulf emirates as oases of peace in a generally tumultuous region has largely been shattered with Iran’s firing of missiles into those countries where there are US bases – the United Arab Emirates, where Abu Dhabi and Dubai were hit, as well as the states of Qatar and Kuwait. Additionally, Israel has bombed Lebanon, from where the Iran-backed militia, Hezbollah, has fired rockets into northern Israel.

REGIONAL WAR

So, unchecked, this affair could morph into a nasty and extended regional war or a longer-term, low-intensity conflict. Or, maybe a new surge of global terrorism.

This development, and its several potential scenarios, are of especial interest to CARICOM at this time. Only last week, the ministers of state for foreign affairs for Saudi Arabia and UAE were in Basseterre, St Kitts and Nevis, for a summit of CARICOM.

The idea was to strengthen the basis of deeper economic cooperation between the community and those states. This newspaper had also hoped the engagement would also provide an entry to the Gulf Cooperation Council (GCC) and an opportunity for CARICOM to widen its global relationships in the face of the fracture of the existing internal order.

At the time of the summit, US and Iranian officials were concluding a round of talks in Geneva on Iran’s nuclear enrichment programme, which Tehran insists were for peaceful purposes. Oman’s foreign minister, Badr Albusaidi, who mediated the negotiations, said “significant progress” was made at the session. He expected an early resumption of the talks – in Vienna this week.

Instead, the world is facing a regional war, with possible global impact and no clear path to sustainable resolution and international stability.

Addressing these matters, we appreciate, can be difficult especially when the world’s most powerful country, and states that CARICOM members are attempting to woo are on one side of the fight. However, the community, while being tactful, can’t be silent.

It is in the Caribbean’s interest to join the voices in the call for an end to hostilities and a return to the negotiating table and in a situation that takes everyone’s sovereign and legitimate interests into account.