Surging Oil Exports Should Boost Guyana's Fiscal Balances

• As an increasingly important oil producer and exporter in Latin America, Guyana is well-positioned to benefit from the higher oil price environment caused by the US-Iran conflict. Under BMI’s baseline scenario, its Oil & Gas team forecasts that global Brent will average US$88/barrel (bbl) in 2026 (previously US$78/bbl), up from US$69/bbl in 2025, which will provide a substantial boost to Guyana's oil export earnings and inflows into the country's Natural Resource Fund (NRF), which then feeds into government revenues.
• Risks to this forecast now lean to the downside as oil prices have fallen sharply since the US-Iran agreement on a framework peace deal that is set to be signed on June 19, but BMI still believes that the spillover effects from the conflict will be net positive for Guyana in the near-term given the outsized influence of oil exports on the economy (crude accounts for around 90% of total goods exports and 50% of government revenues in 2025).
• Higher oil export inflows into the NRF, which manages the distribution of Guyana's oil earnings, will also bolster the country's fiscal position, most likely from 2027. The budget deficit will widen modestly from 4.9% of Gross Domestic Product (GDP) in 2025 to 5.3% in 2026, as under current rules, NRF withdrawals are capped by earnings from the previous year (2025), when oil prices were lower.
• However, a high oil price environment will enable the government to increase withdrawals and expand its fiscal stimulus in 2027. Moreover, ExxonMobil recently indicated that higher global oil prices are accelerating its cost recovery in the Stabroek Block, and once completed, this would lead to Guyana receiving a greater share of future oil earnings (compared to the current 12.5%), potentially providing an additional boost to revenues from 2027.
• Consequently, BMI expects the budget deficit to narrow further over the medium term as the ramping up of oil output continues to sustain strong revenue growth. Guyana's crude production is expected to more than double from the estimated average of 732,000 barrels per day (b/d) in 2025 to 1,493,000b/d by 2030. This will support robust oil revenue growth over the coming years, assuming broadly stable global oil prices. If oil prices fall further than expected, expectations are for more moderate revenue growth due to NRF withdrawal limits, while growth would accelerate if prices rise higher than forecast - potentially caused by instability in the Middle East.

(Source: BMI, A Fitch Solutions Company)