T&T Energy Sector Shows Mixed Performance in Q1 2025

• Trinidad and Tobago's (TT) energy sector showed mixed performance in the first quarter of 2025, with natural gas output declining year-on-year (YoY) even as crude oil production and select petrochemicals recorded gains, according to the Central Bank (CBTT).
• Data from the Ministry of Energy and Energy Industries pointed to a YoY reduction in the production of natural gas (-5.9%) in Q1. Crude oil production improved (6.1%), while the performance of the petrochemical industry was mixed. Expansions in ammonia (4.7%) and urea (12.5%) were countered by a decline in methanol output (-15.3%).
• Oil prices spiked due to concerns about supply disruptions stemming from military conflict in the Middle East. Brent crude prices reached a high of US$76 per barrel but subsequently fell below US$70 per barrel following the announcement of a ceasefire. These prices remained far below the US$85 per barrel price assumption and will likely impede the TT54.012Bn revenue that was set in T&T’s 2024/2025 budget. Financial markets nonetheless remain on edge in a very fluid situation. Higher energy prices and a possible escalation of hostilities pose risks for growth and inflation across the world, although energy exporters could benefit from the terms of trade shock.
• The CBTT also reported that while momentum in the non-energy sector appears to be slowing, overall economic activity remains positive. Indicators monitored by the Central Bank suggest that positive performances in the manufacturing, distribution and finance sectors were somewhat offset by sluggishness in the construction and utilities sectors.
• Inflation has also remained contained during the review period. Headline inflation, as measured by the Central Statistical Office's Consumer Price Index, rose to 1.4% YoY in May 2025 from 0.7% in January 2025. Core inflation (which excludes food prices) rose by 0.7%, while food prices increased by 4.1% in May. Food prices have been driven by higher prices for meat and for imported items such as butter, margarine and edible oils.
• Taking all these factors into account, the Monetary Policy Committee (MPC) agreed to maintain the repo rate at 3.5%,' it stated. The Central Bank stated that its MPC considered the 'uncertain outlook' for global growth and inflation amidst trade policy developments and geopolitical tensions in the Middle East.

(Sources: CBTT, Trinidad Express Newspapers)